Korean conglomerate Hanwha Systems Co. will invest $300 million in satellite startup OneWeb, in a deal that begins to fund the British company’s second generation of spacecraft.
OneWeb is encircling the earth with 648 satellites in low-earth orbit to blanket the planet with broadband, filling gaps in coverage and selling bandwidth to governments and businesses.
It’s competing with the $30 billion Starlink project from Elon Musk’s Space Exploration Technologies Corp., which has launched more than 1,500 satellites and, unlike OneWeb, also plans to sell broadband straight to consumers.
OneWeb expects Hanwha’s investment to close in the first half of 2022, it said in a statement. The Seoul-headquartered company will own 8.8% of OneWeb and gain a board seat. The deal cements a turnaround since OneWeb went bankrupt at the outbreak of the coronavirus pandemic.
It was rescued unexpectedly in June last year by India’s Bharti Group and the U.K. government, and has since built a consortium of owners including French satellite operator Eutelsat SA, billionaire Charlie Ergen’s Hughes Satellite Systems Corp, and Japan’s SoftBank Group Corp, which had also funded it the first time around. Bharti, run by telecommunications tycoon Sunil Mittal, will remain the biggest owner.
In June, London-based OneWeb said its first planned network was already fully funded. The injection from Hanwha takes OneWeb’s equity value to $2.7 billion and marks its first money toward upgrading that system with new satellites carrying better technology. It’s launched 254 of the first batch so far.
Hanwha Corp. has interests in myriad sectors from aerospace to financial services, hospitality, construction, real estate, chemicals, plastics, batteries and solar energy. It also recently invested in Bill Gates-backed satellite antenna startup Kymeta Corp.
Despite a wave of so-called new space investment, low-earth orbit satellites remain a risky business and many have gone bankrupt. British ministers have been under pressure to justify their unusual $500 million rescue of an unproven business at the height of the pandemic. The U.K. has a so-called golden share which gives it extra control over who else can invest in the company.
Britain’s business secretary Kwasi Kwarteng said the Hanwha investment “is the latest in a series of votes of confidence in the company from the market.”