WASHINGTON – OneWeb has raised $1.2 billion in an investor round led by SoftBank, completing the non-debt financing the start up needs to build its satellite internet constellation.
Japan-based SoftBank invested $1 billion of the total $1.2 billion, and has also become a strategic partner, with one of its directors, Ronald Fisher, joining OneWeb’s board of directors.
Combined with the $500 million OneWeb raised in June 2015, the total amount gathered now stands at $1.7 billion out of an expected total cost of $2.5 billion to $3.5 billion for the full constellation of 900 small satellites.
OneWeb Founder Greg Wyler told SpaceNews that thanks to SoftBank, the company has raised more from investors than originally anticipated, allowing OneWeb to forgo a third investment round.
“The plan was that the $500 million raised in June of 2015 would last us about 18 months,” Wyler shared. “Then, in that time, we would raise another $500 million, and about a year after that we would raise another $500 million. With SoftBank we raised the B round and compressed the B and the C rounds together.”
Wyler said the company found the second round quickly oversubscribed. Conversations with SoftBank started only a few months ago. Wyler said OneWeb’s previous partners committed additional funding in this second round to reach the $1.2 billion total. Airbus Group, Intelsat, Bharti Enterprises, Totalplay, Hughes Network Systems, Qualcomm, Coca-Cola Co., and the Virgin Group are all existing investors. Wyler did not name which partners contributed a second time, but said the second round fulfills all the capital OneWeb intends to gain from its equity investors.
“We planned for $1.5 billion in total funding, and we have exceeded that, so there are no current plans to go into the markets to raise more money,” he said.
To complete the system, OneWeb plans to use debt financing, Wyler said. After building the first 10 satellites in France, OneWeb plans to produce the rest in the United States, with parts also coming from Canada, the U.K. and elsewhere. With a presence in the U.S., France and Canada, OneWeb is positioned to tap export-credit financing from three export-credit agencies that have been supportive of satellite ventures in recent years.
In a Dec. 12 joint statement, SoftBank and OneWeb said the new capital will support the construction of a manufacturing facility in Exploration Park, Florida, capable of churning out 15 satellites per week, and is expected to create nearly 3,000 new U.S. jobs in engineering, manufacturing and supporting roles over the next four years.
Masayoshi Son, chairman and CEO of SoftBank said in the statement that the OneWeb investment is the beginning of greater investment in the U.S. following a recent meet up with President-elect Donald Trump.
“Earlier this month I met with President-Elect Trump and shared my commitment to investing and creating jobs in the U.S. This is the first step in that commitment. America has always been at the forefront of innovation and technological development and we are thrilled to be playing a part in continuing to drive that growth as we work to create a truly globally connected ecosystem,” Son said.
Wyler said the SoftBank investment does not constitute a commitment on OneWeb’s part to build or source materials for its constellation from Japan. However, given SoftBank’s portfolio of tech-companies, Wyler said OneWeb will be working with them “to learn and gain all the support we can.” SoftBank is the majority owner of U.S. mobile network Sprint, has shares in Chinese e-commerce giant Alibaba, and this summer acquired semiconductor company Arm Holdings for $32 billion.
Wyler said it is possible OneWeb could have all 900 satellites orbited by 2020. Initial services would start around 300 satellites, he said.
Wyler said it was SoftBank’s resonance with the vision of OneWeb that sparked the billion-dollar investment. Son, he said, “believed in the need for global internet access, global knowledge infrastructure, the mission of connecting every school by 2022 and the excitement for bridging the digital divide.
He said OneWeb also gave itself a deadline recently for connecting what is now, based on International Telecommunication Union numbers from the UN agency’s ICT Facts & Figures 2016 report, the almost four billion people that lack access to the internet.
“By 2027, we want to fully bridge the digital divide,” Wyler said. “That is an incredibly difficult goal, but we believe we have a path that will take us there.”
Once complete, OneWeb expects its constellation to provide more than 10 terabits per second of new capacity, supporting 2G to 5G communications and Wi-Fi.