O3b Networks, a corporate and venture capital-backed satellite start-up, has raised $1.2bn in debt and equity in its final round of funding before launching its service in 2013.
A third of the money, $410m, is coming as equity, of which $230m is new commitments. The other $180m had previously been provided by search engine group Google, venture capital firm North Bridge Venture Partners, investment bank Allen & Company, satellite operator SES, cable company Liberty Global and UK-based bank HSBC’s Principal Investments division.
These existing investor were joined by Development Bank of Southern Africa (DBSA), Sofina and Satya Capital in a consortium providing the new equity.
With this final round of funding, SES will become the largest minority shareholder of O3b Networks by adding 10 percentage points to its existing 34% stake through investing another $75m in the new round. SES had previously agreed to invest $80m and will provide in-kind services, including commercial and engineering expertise to its portfolio company.
Romain Bausch, executive president of SES, said: "With their satellite network, O3b will be able to provide emerging markets with the fast and reliable internet connectivity they currently [lack]. This investment also perfectly complements our strategy to increase SES’ presence in developing countries, and to ensure satellite’s prominent role in their future."
O3b Networks, which stands for the "other three billion" people in emerging markets without easy and reliable access to telecoms, will initially launch eight satellites that will be placed in medium earth orbit 8,000 kilometres from the earth. This is closer to the planet than geostationary satellites at over 35,000km. O3b’s satellite system will cover about 70% of the world’s population with fibre-quality internet connectivity.
The debt was provided by banks HSBC, ING, CA-CIB, Dexia, DBSA, Africa Development Bank, Deutsche Entwicklungs Gesellschaft (DEG), Société de Promotion et de Participation pour la Coopération Economique (Proparco), Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), International Finance Corporation and Emerging Africa Infrastructure Fund.