Space startup OneWeb files for bankruptcy

In a major blow to the satellite industry, OneWeb, a high-profile United Kingdom-based startup that had been building a satellite network to deliver broadband across the globe, has collapsed.

The company blamed the novel coronavirus pandemic for its inability to secure new investment, and said it is laying off the majority of its staff while it seeks a buyer and filing for bankruptcy protection in the United States.

In a statement issued on Saturday, the company said it had been close to obtaining financing but that "the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19".

Due to the pandemic, the aerospace industry, like much of the global economy, has implemented contingency measures, including putting restrictions on the movement of equipment and personnel, the BBC reports.

OneWeb is in a hugely expensive race with a number of other companies that want to provide the same kind of service.

California entrepreneur Elon Musk is developing his Starlink constellation, and Jeff Bezos, the boss of Amazon and the world's wealthiest individual, has proposed a system he calls Kuiper.

Adrian Steckel, CEO at OneWeb, stated: "OneWeb has been building a truly global communications network to provide high-speed low latency broadband everywhere. We remain convinced of the social and economic value of our mission to connect everyone everywhere.

"Our hope is that this process will allow us to carve a path forward that leads to the completion of our mission, building on the years of effort and the billions of invested capital.

"It is with a very heavy heart that we have been forced to reduce our workforce and enter the Chapter 11 process while the company's remaining employees are focused on responsibly managing our nascent constellation and working with the court and investors."

In a joint-venture with Airbus, the company last year opened the world's first high volume satellite production facility in Florida near the Kennedy Space Center.

OneWeb, founded in 2012 as WorldVu Satellites, has been seeking to build out a constellation of broadband internet satellites that would operate in low-Earth orbit.

These would provide low-cost connections to customers on the ground with coverage that extends into more remote and hard-to-reach areas that are not addressed by current ground-based networks.

It was only just over a week ago, on March 21, that OneWeb launched another big batch of satellites from a base in Baikonur, Kazakhstan, that carried 34 more spacecraft into orbit. This brought the company's total number of satellites in orbit to 74, in a constellation planned to total at least 648 spacecraft.

Earlier this month, Bloomberg reported that OneWeb had been considering a bankruptcy protection filing, while also weighing other options.

One of those other options was a new funding round targeting a raise of around $2 billion. The company had previously raised $3 billion over multiple rounds, including $1.2 billion in 2016 and $1.3 billion in 2019 respectively, that both had SoftBank as lead investor.