The satellite venture whose investors include Virgin Group and Coca-Cola is preparing to raise up to $2.5bn
A satellite venture designed to provide low-cost internet access to billions of people and backed by Sir Richard Branson is preparing to raise billions of dollars as it seeks to get off the launchpad.
Sky News has learnt that OneWeb, whose shareholders include some of the world’s biggest companies, is to hold a beauty parade of investment banks ahead of a fundraising planned for next year.
The talks with bankers, which are at an early stage, follow a $500m investment in OneWeb in June as it seeks to build a network of solar-powered terminals that will be connected to almost 650 ‘micro satellites’ in low-earth orbit.
OneWeb’s ambitious plans are part of a space race taking place led by major communications and technology companies in an attempt to connect huge numbers of people to the internet in faster-growing economies which currently lack the required infrastructure.
More than 1bn households around the world remain unserved by internet coverage, with OneWeb also keen to target government, military, aviation and other users.
The venture, whose parent company is called WorldVu Satellites, counts Airbus Group, the Indian conglomerate Bharti Enterprises, Coca-Cola, Intelsat and Qualcomm among its shareholders.
Insiders said that June’s funding round had been oversubscribed, and that a number of companies which had been keen to invest had not been allocated any shares because of the level of demand.
Some industry observers, however, have questioned the level of cash actually invested in the business, and have cast doubt on OneWeb’s prospects.
The preparations for next year’s equity-raising come just weeks after Avanti Communications, a London-listed company, raised approximately £80m through a bond issue to fund the launch of its next satellite.
Last week, Inmarsat launched the final component of its Global Xpress network which will offer high-speed mobile broadband service from a single provider.
For Sir Richard, the OneWeb project will give his Virgin Galactic space tourism business a valuable commercial revenue stream at a time when the core venture is under pressure to demonstrate that it has a viable future.
“OneWeb is well on its way to enabling affordable rural and remote internet access,” a spokesman for the project said.
“After a successful $500m A-round funding which met all of its financial goals, OneWeb has received considerable interest from the investment community and plans for a follow on round late next year.”
Speaking in June, the Virgin Group founder said:
“Our vision is to make the Internet affordable for everyone, connecting remote areas to rest of the world and helping to raise living standards and prosperity in some of the poorest regions today.”
Barclays, which handled the initial $500m fundraising, is expected to be in the frame to handle the larger subsequent round.
Source : SKY NEWS