- Parabolic Arc
- June 2, 2023
Softbank Writes Down $424.7 Million Investment in OneWeb
Citing a story in the Sunday Telegraph, City A.M. reports that Softbank took a £380 million ($424.7 million) impairment loss on its investment in OneWeb. Softbank is the largest shareholder in the Internet satellite company.
Airbus, Qualcomm and Virgin Group are among other shareholders in the London-based satellite firm, which boasts a valuation of more than $1bn (£823m) and has earned sought-after “unicorn” status.
In addition to the Softbank writedown, some early investors have lost as much as half of the value of their stakes, according to the report
Oneweb, which secured $1.25bn in its latest Softbank-led funding round, has ramped up its plans for satellite production amid competition from Elon Musk’s SpaceX and Jeff Bezos’s Amazon.
7 responses to “Softbank Writes Down $424.7 Million Investment in OneWeb”
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I don’t see how OneWeb can compete with SpaceX that already has the lowest cost launcher which can recover its first stage. So, for every 60 satellites that it launches it has to build only an upper stage with only one engine. OneWeb has only six satellites in orbit and no follow-up launches for six months now.
One Web was started in 2015 and had it’s roots in the early 00’ties. Musk and SpaceX have made some fundamental changes since then.
The one saving thing for OneWeb is they recently got some spectrum rights ahead of their rivals:
I’ll bet that spectrum is ‘oversubscribed’ massively to various lenders.
I think OneWeb’s money is equity investment rather than loans. That doesn’t mean there won’t be squabbles aplenty among the investors over whatever value still remains to OneWeb’s spectrum rights, but those rights, if unexercised, have a very limited shelf-life.
Given that OneWeb deliberately crippled the design of its network at the behest of totalitarian potential customers – Russia and China – and was recently stiffed by Russia anyway, I wonder if SoftBank perhaps heard some rumblings about China doing the same and decided to get out ahead of the crowd by acknowledging its losses early. Or maybe the Russia thing was enough on its own to prompt the move.
With Western militaries off the table as potential customers, given that pretty much every bird in the OneWeb constellation was going to pass through Russian hands before launch – not to mention the inferior quality of service its crippled architecture would provide – Wyler’s only remaining potential customer base was the various Grasshutistans of the world. These have little money and are, for that reason, far likelier to look favorably upon a network with better capability and intrinsically lower prices – Starlink.