French satellite operator Eutelsat SA today disclosed that it’s raising €1.35 billion in new funding to support growth initiatives in a deal set to close by year’s end.

More than half the capital, or €717 million, will be provided by the French government. The rest is set to come from aerospace company Bharti Space, container ship operator CMA CGM and investment firm Fonds Strategique de Participations. The participants in the round will own more than 60% of Eutelsat after the deal closes.

The U.K. government, which has a 10.9% stake in the company, could also join the round down the road. Reuters cited a source as saying that discussions about an investment are ongoing.

The U.K. government gained its stake in Eutelsat after the company’s 2023 merger with OneWeb, a London-based SpaceX Corp. rival. OneWeb launched a network of 654 internet satellites prior to the deal. The box-shaped systems, which weigh about 330 pounds apiece, circle the Earth at an altitude of 745 miles.

Satellites were historically deployed at a significantly higher orbit known as GEO. Deploying satellites closer to Earth reduces the distance that data has to travel to and from the ground, which lowers latency for users. The fact that the systems operate at a lower altitude also helps reduce launch costs.

Alongside the OneWeb constellation, Eutelsat operates a network of traditional GEO satellites. Those systems power several thousand TV and radio stations worldwide. 

Eutelsat’s OneWeb constellation is the second largest low-Earth orbit, or LEO, satellite network after SpaceX’s Starlink. The latter company has so far launched more than 7,000 LEO satellites. It plans to deploy about 5,000 additional Starlink systems in the coming years.

Eutelsat will upgrade its OneWeb constellation to more effectively compete with Starlink. The funding round announced today could help it cover a part of the project’s budget, which could reportedly reach 2.2 billion euros on the high end. The initiative will reportedly see Eutelsat deploy at least 440 new satellites. 

Late last year, Eutelsat inked a deal to purchase 100 initial satellites from aerospace giant Airbus SE. They will be based on a different design than the systems that currently make up the OneWeb constellation. According to SpaceNews, one of the new architecture’s main improvements is that it will provide the ability to update the onboard software in orbit.

Airbus will start delivering the new satellites in late 2026. Eutelsat expects to deploy them in orbit by the end of the decade. On the occasion of the new funding round, the satellite operator disclosed that it has a revenue backlog of €3.7 billion comprised mainly of internet connectivity deals.

Image: Eutelsat