Google-Backed Satellite Startup Secures $1.2B
O3b Networks Ltd. , the Google (Nasdaq: GOOG)-backed satellite backhaul startup, has completed its final round of funding before service launch in 2013, bringing the total amount the venture has raised to $1.2 billion.
O3b (which stands for the "other 3 billion") has secured $770 million in debt financing and $410 million in equity investments from banks and investors including Google, SES S.A. (Paris: SESG), HSBC Holdings plc , ING Group , the Emerging Africa Infrastructure Fund, and International Finance Corp.
O3b said that it is now fully funded to launch its first eight medium earth orbit Ka-band satellites and to start offering transmission services to ISPs and telecom operators in the first half of 2013. (See Google Backs Backhaul Startup.)
Why this matters
When O3b started in 2008, the company's original plan was to launch the satellites and services by the end of this year. Even though the company has delayed its launch by almost three years, it has still managed to raise an impressive amount of funding during a difficult and challenging period for the global economy.
O3b's model for connecting the "other 3 billion" -- which refers to nearly half of the world's population that does not have adequate broadband access -- is compelling as well.
Rather than trying to serve those customers directly, O3b is providing the transmission capacity to ISPs, mobile operators, and telcos that will connect their access networks to their core networks and the Internet. The company claims its satellites will cover 70 percent of the world's population.
Google's involvement in O3b is also interesting because the project is one of the Internet giant's infrastructure activities, which have included femtocells, dark fiber, and undersea cables. (See UbiquiSys Gets Google Boost, Google Builds Undersea Cable, and Google: Dark Fiber Story Not So Dark .)
Check out these stories for background on O3b's progress since it started in 2008, and Google's infrastructure investments:
- Google's Powerline Play
- Google Invests in 3G Startup
- Google Goes Nuclear
- O3b Wins Congo Deal
- O3b Touts Backhaul Demand
- O3b Touts Orders, New HQ
- O3b Wins Backhaul Deals
- O3b Wins in Africa
- O3b Scores in Ghana
— Michelle Donegan, European Editor, Light Reading Mobile