This story was updated March 28 after OneWeb announced its Chapter 11 filing.

WASHINGTON — Satellite internet startup OneWeb filed for Chapter 11 bankruptcy Friday after its largest investor, Softbank, rejected a request for additional funding.

“It is with a very heavy heart that we have been forced to reduce our workforce and enter the Chapter 11 process while the Company’s remaining employees are focused on responsibly managing our nascent constellation and working with the Court and investors,” OneWeb CEO Adrien Steckel said in a news release issued late Friday night.

OneWeb filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of New York. The company said it laid off about 85% of its 531 employees prior to filing for bankruptcy.

Softbank, having already invested roughly $2 billion in OneWeb, decided it was the “responsible decision” not to invest further given the startup’s high cash needs, compounded by the global financial instability caused by the coronavirus, one source said.

OneWeb, in its March 27 news release, blamed the coronavirus pandemic for its inability to raise the money it needed to avoid bankruptcy.

“Since the beginning of the year, OneWeb had been engaged in advanced negotiations regarding investment that would fully fund the Company through its deployment and commercial launch,” OneWeb said in the news release. “While the Company was close to obtaining financing, the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19.”

OneWeb, which has been aiming to launch at least 648 satellites to deliver global broadband connectivity, has 74 satellites in orbit following a March 21 launch that put up 34. The U.K.-based company has raised $3.4 billion, but outside analysts estimated the satellite system would require as much as $7.5 billion to complete.

OneWeb’s filing shows $2.1 billion in total liabilities, including $1.7 billion in senior secured financing plus money owed to between 1,000 and 5,000 creditors.

Topping the list of OneWeb creditors with unsecured claims is launch service provider Arianespace, which is owed $238 million as of the March 27 filing. OneWeb signed a $1.1 billion contract with Arianespace in 2015 for 21 Soyuz launches. Last year, OneWeb signed another contract with Arianespace for the maiden flight of the Ariane 6, with options for two more Ariane 6 missions. Arianespace has provided three of the contracted Soyuz launches to date, and was expected to conduct a fourth launch in May.

Other unsecured creditors include Qualcomm Technologies ($8 million), Deloitte Touche Tohmatsu ($6.9 million), Hughes Network Systems ($5.4 million), Deutsche Bank ($5.2 million), Viasat ($1.2 million), Nokia ($988,000), Rockwell Collins ($597,000), USSI Global ($501,000), Ruag ($328,000) and KSAT ($117,000).

OneWeb’s top four shareholders are Softbank (37.41%), Qualcomm (15.93%), Greg Wyler’s 1110 Ventures LLC, (11.94%), and Airbus (8.5%).

With the bankruptcy filing, OneWeb joins the rank of companies that ran out of money trying to launch and operate large numbers of communications satellites into low Earth orbit.

Iridium, Globalstar, Orbcomm and Teledesic all went bankrupt about two decades ago, though only Teledesic failed to emerge from bankruptcy and deploy a second-generation constellation. Filing for Chapter 11 gives companies a chance to emerge from bankruptcy debt free and remain in business, albeit usually with a different ownership structure.

OneWeb, in a news release announcing the bankruptcy filing, said it plans to “pursue a sale of its business in order to maximize the value of the company.”