Global satellite broadband venture OneWeb has secured US$500m in series A funding from a group of international companies.
These comprised existing investors Qualcomm and Virgin Group, along with new investors Airbus Group, Bharti Enterprises, Hughes…
Global satellite broadband venture OneWeb has secured US$500m in series A funding from a group of international companies.
These comprised existing investors Qualcomm and Virgin Group, along with new investors Airbus Group, Bharti Enterprises, Hughes Network Systems, Intelsat, Coca-Cola and Totalplay, a media and telecoms group owned by Mexican billionaire Ricardo Salinas.
Speaking at a press conference in London, OneWeb CEO and founder Greg Wyler said the investment would last several years, and that the company would seek one more funding round as part of its business plan.
Wyler said: “It turns out that there are a lot of people who are interested in funding who could not participate in this round. We set the limit at US$500m this time. We have a debt equity structure like most normal companies so we will also be raising debt.”
Wyler added that the company is in discussions with export credit agencies, both Coface of France and the US Export-Import Bank.
He said: “It is obviously an important part of all large scale satellite construction projects. We have had discussions with a number of export credit agencies and we have had very positives reports on the project.
“One thing that they look at and one thing that we have had to do is that we couldn’t just imagine the sort of technology we were going use for this system, we had to have all the pieces in place. You have to be able to demonstrate that everything can be built and the technology to do this is here and ready. And you need to do that for financing, certainly for debt financing.
“The ECAs have a conservative route to financing where they want to see exactly what is being built. They want to know what is being built and they want consultants there to look through all that technology. We have also had our own consultants vetting every aspect of our system.”
The amount each company invested was not disclosed nor was the equity stake that each would take. However, satellite operator Intelsat stated that it invested US$25m for a minority share.
Qualcomm and Virgin were founding investors in OneWeb when the company was launched at the beginning of 2015. Both Paul Jacobs, executive chairman of Qualcomm, and Sir Richard Branson, founder of the Virgin Group, have seats on the board of OneWeb alongside Wyler. Following this latest investment, they will be joined by Sunil Bharti Mittal, founder and chairman of Bharti Enterprises, and Tom Enders, CEO of Airbus. The other investing companies will have board observers.
There is a strategic element to the participation of all the new investors.
Indian business group Bharti Enterprises owns Bharti Airtel, the world’s fourth largest mobile operator by subscriber numbers with operations in 20 countries across Asia and Africa. Airtel will become a distributer of OneWeb’s broadband services across its operations.
Similarly, Totalplay sees OneWeb as a way of providing broadband coverage to the whole of Mexico.
Hughes, whose parent company EchoStar made the investment, will build and deploy the ground segment for the OneWeb constellation. It will also sell OneWeb services through its distributors.
Pradman Kaul, president of Hughes, commented: “We have been looking at every detail and are excited to participate both in the design, development and production of the ground system. In addition, we will employ the OneWeb network to deliver services to our global base of customers and distribution partners.”
Intelsat said it will use OneWeb’s LEO system to complement its forthcoming Epic system of high throughput satellites, the first of which is due to be launched in Q1 2016. Intelsat pointed to the LEO system giving it the ability to provide connectivity over the Earth’s poles and in urban canyons.
The companies will also collaborate to develop hybrid LEO/GEO end-user access terminals.
Intelsat CEO Steve Spengler told SatelliteFinance that it will also have an exclusive relationship with OneWeb in providing the latter’s connectivity services for the aeronautical, maritime and US government markets. (A more detailed discussion with Spengler over Intelsat’s involvement in the project will be published shortly).
The investment by Coca Cola seems more left field but Wyler pointed to the company’s 25 million resellers worldwide, some in the furthest, most rural areas. He said that Coal Cola had the expertise in delivering to these areas and understood the market. He also pointed to the company’s female empowerment programme and how increased connectivity plays an important part of that.
Barclays acted as exclusive placement agent to OneWeb on the financing.
Places largest ever rocket order
On 15 June, OneWeb revealed that it had signed an agreement with Airbus to design and manufacture its first 900 microsatellites. To launch all of these, OneWeb has announced what it describes as the largest commercial rocket acquisition ever, comprising more than 65 rockets.
This is made up of 21 Soyuz launch orders from Arianespace and 39 launches from Virgin Galactic’s LauncherOne. Under the Arianespace contract, OneWeb has options for five additional Soyuz launches and three Ariane 6 launches.
The bulk of these satellites will be launched in 2018 and 2019, with each Soyuz carrying 36 microsatellites per launch. Arianespace stated that it will utilise the Soyuz launch pads in French Guiana and Baikonur, as well as additional launch pads from Russia to meet the tight launch manifest.
The initial satellites will go up in late 2017. These will be production satellites, not off the planned Airbus assembly line but designed and built in exactly the same manner and with all the capabilities of the other satellites.
