Tuesday, March 9, 2021

A loon comes down to earth

Must read


This is the web version of Terms sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to receive it for free in your inbox.

It was an admittedly wacky project in the first place: Loon, a high-profile project to deliver the internet via helium balloons, will be shut down, Google’s parent company Alphabet said Thursday evening.

Formed nearly a decade ago at tech giant X’s ‘moonshot’ focused research lab, the hope was to use the balloons to send internet services to areas where access to Internet is limited or non-existent. Although the numbers are hard to come by, an estimate 3 billion to 4 billion people around the world today still cannot buy online (or read this newsletter).

So it makes sense that many seeing tech giants and billionaires see this practice as a major business opportunity: Elon Musk at Starlink; Richard Branson and SoftBank have OneWeb; Jeff Bezos’ Amazon has the Kuiper project. While the aforementioned projects focused on sending satellites into space, Loon focused on high altitude balloons.

But as with moonshot betting, it doesn’t always work.

“While we have found a number of willing partners along the way, we haven’t found a way to cut costs enough to create a long-term sustainable business,” wrote Alastair Westgarth, CEO of Loon in a comment. blog post. “Today I am sad to say that Loon is going to retire.”

here is a good Wired Dynamics Breakdown: Yes, there are many in the world that lack internet connection. But many of these underserved populations cannot afford Loon’s services or are simply not interested in the internet. This means that there is no financial merit for Alphabet – and the project too.

But the creators of Loon were aware of this possible future. “The idea might sound a bit crazy – and that’s part of why we call it Project Loon – but there’s solid science behind it,” Mike Cassidy wrote in 2013 of the project’s launch. . Cassidy ran the business at the time.

I can’t help but wonder what happened to the capital from its external investors? HAPSMobile, backed by SoftBank, injected $ 125 million into the company in 2019 as the duo worked on airborne internet connectivity equipment. Personally, I have no answers.

Finances aside, Loon has not been without success. He ran a pilot project in Kenya. He also managed to create a navigation AI managed system.

Are you confident? TAKE A SURVEY: For the 12th consecutive year, Term Sheet is teaming up with Semaphore to conduct its annual confidence survey of venture capital and private equity investors. Over the years, hundreds of you have responded share your perspective on investing. I will publish the results in February. Take it here.

- Advertisement -

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

Latest article