OneWeb has chosen former GeoEye CEO Matthew O’Connell to lead the satellite broadband startup as it looks to raise more than US$2bn for its low-orbiting constellation. O’Connell has a background in Wall Street, which he tells SatelliteFinance puts him in good stead for considering a range of financing options, with export credit agencies being just the start.
Global satellite broadband startup OneWeb has appointed the former president and CEO of satellite imaging operator GeoEye Matthew M. O’Connell as its new chief executive officer.
O’Connell takes over from OneWeb founder Greg Wyler who becomes the company’s chairman. Commenting on the appointment, Wyler said: “We have been searching for the right CEO to drive OneWeb’s daily continued growth. Matt has deep financial, legal and management experience in building both public and private businesses which makes him an ideal addition to the OneWeb team.
“Building out our senior management team is the next step in scaling the business and realizing this opportunity.”
O’Connell led GeoEye for a decade from 2003 until the business was sold to its peer DigitalGlobe in January 2013. During that time he built up the business from a company with an enterprise value of US$33m (with zero equity value) to one worth almost US$1.5bn (with an equity value of US$800m).
Speaking to SatelliteFinance, O’Connell said his main priorities as OneWeb’s new CEO were to finish the satellite manufacturing joint venture with Airbus, put the initial team in place and begin looking at how best to finance the constellation.
O’Connell said the Airbus JV is 98.5% done with the satellite design almost finalised. As to scaling up the OneWeb team, he pointed out that the vision and scale of the project had attracted a lot of talent, particularly engineers, and that they are now looking at the input procedures to manage the expected rapid expansion of the workforce. He added: “By the end of the year we hope to have an initial team in place and then we can build on that.”
By that point OneWeb should also have found a permanent headquarters, with the team currently spread around all over the US and further afield. Florida, where the Airbus manufacturing facility will be, is the frontrunner.
O’Connell said: “Florida has a very aggressive programme called Space Florida to attract businesses there. In addition, the Airbus plant will be there so Florida would be a natural place to start. However, Virginia and Maryland have also been in contact. So there are a lot of States that are willing to cut creative deals. But we have yet to decide.”
As for the financing, O’Connell, who previously worked on Wall Street, said the company remained open to the various options available.
“A lot of people are interested in this space. If you look at what is going on in Silicon Valley, there has been a great deal of capital flowing into the small at market. So even before I came on these guys were getting inbound calls from potential investors. Add to that my work at GeoEye has meant that we made a lot of friends on Wall Street. There are a lot of bankers and investors who made money on GeoEye who are interested in playing in this.
“I think that the export credit agencies are an obvious way to start. You get the kind of global players involved that Greg got and obviously all the ECAs are interested. But it is not just the obvious one in France, with MDA now a partner we can work with Export Development Canada. So I think that ECAs will be an obvious first approach and that is what Greg had started on.
“I come from a Wall Street background so I’m also going to think about financing alternatives that aren’t straight ECA. I think the timing is something we are going to have to look at hard, and that is why it is my number three priority because on the one hand ECAs are attractive and they offer attractive terms but right now the costs of capital are pretty low in the public markets and so it might be more favourable to tranche things and do a little equity and debt. Sometimes for the first hit it can look more expensive but it so greatly reduces the cost of subsequent equity and debt that it can be more appealing to do it that way.
“It will take a while to get our arms around it and the good news is that we have cash that will carry us through initial development work, so it won’t be near term but it is certainly something that we are starting to work on now.”
MDA announced at the beginning of October that it had joined the OneWeb team with the company likely to work closely on the antenna and payload design.
Alongside securing the circa US$2bn of financing needed to fund the project, O’Connell argued that the other major challenges facing OneWeb are execution and schedule.
He pointed to his work at GeoEye for putting him in good stead to achieve this. “GeoEye had huge challenges. I had to put it in bankruptcy when I was sent down by the venture capital firm that I used to work for. When I went there you had 60 people doing US$7-9m a year, it was losing a pile of dough and so I was told to sell it and the best offer I got was for US$33m. Ten years later we had 760 people, we were doing between US$300-400m a year and the value of the business was US$1.3bn. So we had huge challenges and we met them. We had schedule challenges, we had execution challenges.
“These are similar to what OneWeb has. But what we didn’t have at GeoEye is that we didn’t have a visionary leader, we didn’t have the amazing partners that Greg has been able to attract.
“When I met with Tom Enders of Airbus, which I have done with all of the founders and investors, he said ‘I think this is good for Airbus because we have never built something on this scale and at this price point before but I think this is where the company has to go in the future’. I said I couldn’t agree more. So I think that while the schedule is certainly challenging, we can do it.”
