European satellite operator Eutelsat has invested $550 million in LEO operator OneWeb. The new funding brings OneWeb’s post-bankruptcy fundraising to $1.9 billion, providing it with 80% of the total financing it needs to complete its first generation broadband satellite constellation.
Eutelsat will get a 25% equity stake in OneWeb and similar governance rights to the U.K. Government and Bharti Global. The investment is expected to be completed in the second half of 2021, subject to regulatory approval.
“We are delighted with the investment from Eutelsat, which validates our strategy, technology and commercial approach,” said Neil Masterson, Chief Executive Officer of OneWeb. “Eutelsat’s global distribution network advances the market entry opportunities for OneWeb and we look forward to working together to capitalize on the growth opportunity and accelerate the pace of execution.”
OneWeb will have a 648 LEO satellite flight to deliver high-speed, low-latency global connectivity. Partnering with Eutelsat will help both company’s commercial sales, leveraging Eutelsat’s established commercial relationships with government and enterprise customers. OneWeb provides Eutelsat with the ability to provide low-latency services with global reach and the two will be able to explore LEO/GEO configurations with Eutelsat’s existing GEO fleet.
“We are excited to become a shareholder and partner in OneWeb in the run up to its commercial launch later in the year and to participate in the substantial opportunity represented by the LEO segment within our industry,” Rodolphe Belmer, Eutelsat’s Chief Executive Officer, said. “We are confident in OneWeb’s right-to-win thanks to its earliness to market, priority spectrum rights and evolving, scalable technology. With more than 40 years’ expertise in the global satellite industry, we look forward to working alongside the UK Government, Bharti and the other shareholders to open new opportunities and market access to ensure OneWeb maximizes its potential.”
OneWeb “anticipates” annual revenues of around $1 billion “in year three or soon thereafter, thanks to its partnership driven, wholesale business plan,” according to the company’s press release.
Yesterday, OneWeb successfully launched another 36 satellites into orbit, for a total of 182 satellites in the constellation. The company has two more launches needed so it can start delivering service above the 50degrees latitude, a region that includes the United Kingdom, Alaska, Northern Europe, Greenland, Iceland, the Arctic Seas and Canada, with commercial availability expected by end of this year, and global coverage available in 2022.
Eutelsat may not be the only satellite provider to invest in OneWeb, since looking to round out its fundraising with several hundred million more dollars. Regional satellite operators such as JSAT may end up rounding out OneWeb’s fundraising needs in exchange for local distribution rights.