The satellite startup war is heating up after OneWeb Ltd. recently received $1.2 billion in a new round of financing from backers, helping to launch the company towards its goal of bridging the “digital divide” by making web access universally available and affordable. Company founder Greg Wyler says he expects the company to have 100 million subscribers by 2025, according to the Wall Street Journal.

OneWeb is not the only tech startup with lofty goals. It will have to compete with, among others, Elon Musk’s Space Explorations Technologies Corp., known as SpaceX.

OneWeb vs. SpaceX

According to the Journal, interest in small satellite technology has experienced a resurgence as manufacturers, service providers and new startups all frantically try to snatch up a piece of the market. While OneWeb has been at the forefront of this resurgence, SpaceX will be one of its fiercest competitors. 

Musk announced as early as January 2015 that SpaceX plans to launch more than 4,000 satellites, a network capable of providing high-speed internet coverage to every corner of the globe. At the time, the project was estimated to cost $10 billion, a sizable sum even given Musk's outsized ambitions. But with financial backers like Alphabet’s Google Inc. (GOOGL) and Fidelity Investments, which have collectively contributed $1 billion, SpaceX should have no trouble in obtaining the needed funding to get its satellites off the ground.

As recently as the middle of last November, Reuters reported that SpaceX had filed documents seeking approval from the U.S. Federal Communications Commission for its massive satellite launch. (To read more, see: SpaceX Wants to Launch a Massive Satellite Internet Network (TSLA, GOOGL)).

OneWeb’s Big Name Backers

For its part, OneWeb has a list of big-name backers who are as famous as SpaceX's founder and CEO, Musk, one of the world's most famous entrepreneurs.  Japanese conglomerate SoftBank Group Corp., for one, announced this week it had become OneWeb’s newest partner, and largest shareholder with a 40% stake, after contributing $1 billion in a new round of fundraising that values the startup at around $2.5 billion, according to the Wall Street Journal.

With the investment, SoftBank joins a team of other notable backers including Virgin Group founder Richard Branson, Qualcomm Inc. (QCOM) and a number of other U.S. and foreign companies. These other investors contributed an additional $200 million on top of SoftBank’s $1 billion, ensuring that OneWeb would have one it needs to put 640 satellites into space by 2020. (To read more, see: Softbank’s $50B Fund Fuels Speculation (S, TMUS)).

OneWeb's Strategy

Both OneWeb and SoftBank, according to the Financial Times, indicated that the $1.2 billion investment would be used to build a new satellite production facility in Florida, the construction of which is set to commence in 2018.

The new facility is expected to be highly automated, churning out 15 satellites per week “at a fraction of the cost of what any satellite manufacturing facility in the world can produce today,” according to OneWeb, as reported by the FT. If successful, each satellite is projected to carry a price tag of less than $1 million.

Once OneWeb gets those up into the air, founder Wyler plans to quickly surpass his 100 million subscriber target and then realize the much larger goal of bridging that digital divide. 

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