Sigfox goes into receivership after raising and spending €300mn, seeks buyer in 6-month court protection

France-based IoT service provider Sigfox has gone into receivership, blaming reduced demand and a shortage of key components caused by the pandemic. As Jeremy Cowan reports, the company has been granted bankruptcy protection by a French court during a 6-month ‘observation period’ as it seeks a rescue deal. 

€300 million and counting

Founded in 2010, Sigfox described itself as “the world’s largest Internet of Things service provider”, having raised and spent €300 million (£249 million) building a network of Sigfox operators (SOs) in 75 countries, covering 1.3 billion people and 6 million km². On Wednesday, however, it sought protection from its creditors in a Toulouse commercial court.

Speaking exclusively to IoT Now’s Trending Tech Podcast in July 2021, Sigfox’s CEO, Jeremy Prince and deputy CEO, Franck Siegel, told us that the total funds raised by the company had now reached €300 million. No profits were declared, but they predicted that “huge IoT growth” would beat analyst forecasts, and that there had been a “huge ramp up” in the number of Sigfox connected devices from 2 million in 2017 to 18 million in 2021. The number of Sigfox connections had reportedly grown to 20 million by December, but in a market estimated last August by Berg Insight to have reached 1.74 billion connections the company was clearly failing to compete.

Sigfox blames a combination of a pandemic-led fall in revenues — reported at €60 million in 2019 — and a “slower-than-expected adoption cycle for its technology”. Although the company has always been somewhat opaque in its financial reporting, it was no secret that it often failed to meet revenue targets and some competitors have been predicting this day for years.

Asset sale was only partially successful

In search of a return on its costly network roll-out, attempts were made in 2020 to sell off its French, US and German networks, but only the last of these networks was sold. As we reported in September 2020 (Sigfox and Cube Infrastructure Managers create DACH-wide partnership in IoT infrastructure) the 0G network provider sold its German network to Cube “to finance its continued innovation efforts in data value extraction and improvements in cloud algorithms to reduce energy consumption.” Terms of the deal were not disclosed.

There were other positive developments along the way. In September 2021, IoT Now reported that Sigfox and Coral join forces to spark IoT innovation with AI at the edge. The 0G network and service provider, announced its partnership with Coral, Google‘s platform of hardware components, software tools, and models for building devices with Artificial Intelligence (AI) at the edge. “As further sectors integrate IoT devices into their activities,” Sigfox said, “more data than ever is being collected and industry providers are struggling to find fast and cost-efficient ways to transport and harness it. To solve this challenge, Coral provides the technology to run a machine learning model locally, at the edge, without needing to send large amounts of data to the cloud.”

As we reported in July’s Trending Tech Podcast, there was no lack of ambition by its founders as they sought to “connect every object in our physical world to the digital universe”. And speaking in 2015 after raising €100 million, the co-founder and CEO Ludovic LeMoan (pictured above) said: “Since creating the LPWA space three years ago, Sigfox has become the leading global solution for IoT connectivity.” 

So, what’s next for Sigfox?

The numbers don’t lie. The cost of building and maintaining the networks has been high. The service demand, already weak and under-performing, has clearly been impacted by Covid. Add to this the fact that Sigfox has been hampered in its response by problems in its component supply. The French court will grant it up to six months to find new funding or new owners, but the signs do not look promising.

Source: https://www.iot-now.com/2022/01/27/118862-sigfox-goes-into-receivership-after-raising-and-spending-e300mn-seeks-buyer-in-6-month-court-protection/