VC-Backed Busts: Protostar Ltd.

#4. Protostar Ltd.

Bermuda-based geostationary satellite services operator.

Investment
Protstar raised an undisclosed amount of Series A funding in early 2005 from New Enterprise Associates and SpaceVest (now RedShift Ventures) in March 2005. It added a $90 million Series B round in November 2006 led by VantagePoint Venture Partners, plus $120 million in convertible notes. Pure venture investment over $90 million, although total investment easily tops $200 million.

What happened?
Protstar says that Agrani Satellite Services, which had agreed to lease capacity on ProtoStar’s first satellite, illegally terminated the agreement in March. The eventual result was that the company defaulted on its working capital facility, and a bankruptcy filing in July.

Protostar said it would look to sell its two satellites via a court-supervised auction, and that it received DIP financing from its lenders.

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