OneWeb secures $1.2b from Softbank-led investment

OneWeb has raised $1.2 billion in a new funding round led by Japan’s Softbank, bringing in fresh capital for the US satellite startup to compete with Elon Musk’s SpaceX.

Softbank is investing $1 billion of the total $1.2 billion and has become a strategic partner, with one of its directors, Ronald Fisher, joining OneWeb’s board of directors.

The remaining $200 million will be funded by its current investors, which include Airbus Group, Bharti Enterprises, Intelsat-owned Hughes Network Systems, Qualcomm, and Virgin Group. The transaction is expected to close in the first quarter of 2017.

OneWeb said the money will be used to build a high-volume satellite production plant in Florida, which is expected to create almost 3,000 new engineering, manufacturing and supporting jobs in US over the next four years.

“With this new round of funding and based on our rapid technical progress over the past year, we also announce a much larger goal: to fully bridge the digital divide by 2027, making internet access available and affordable for everyone,” said OneWeb founder Greg Wyler.

The new facility, which will begin production in 2018, aims to produce 15 satellites each week “at a fraction of the cost of what any satellite manufacturing facility in the world can produce today,” the company said.

For Softbank, the $1 billion investment in OneWeb is the first tranche of a $50 billion US investment the Japanese conglomerate’s founder and CEO Masayoshi Son pledged to President-elect Donald Trump.

“Earlier this month I met with President-Elect Trump and shared my commitment to investing and creating jobs in US,” Son said in a media release. “This is the first step in that commitment.”

It is also Softbank’s latest attempts to strengthen the company’s foothold in the burgeoning IoT sector. In July, Softbank, which also owns US mobile carrier Sprint, acquired UK chipmaker Arm for a whopping $31 billion to pursue business opportunities in the emerging IoT sector.

“SoftBank has a long history of investing in disruptive, foundational technologies that promise to help us realize the future sooner. OneWeb is a tremendously exciting company poised to transform internet access around the world from their manufacturing facility in Florida,” Son noted.

Founded in 2012, OneWeb aims to build a communication network with a constellation starting with 720 low earth orbit (LEO) satellites to deliver affordable, high-speed, low latency internet access to rural areas across the United States and emerging markets.