We continue to see the fallout from the COVID-19 pandemic and its impact on the tech industry, with one of the latest developments coming from France. Sigfox — a high-profile IoT startup that had raised over $300 million in venture capital and had ambitions to build a global communications network using a new approach to wireless networking — has filed for bankruptcy protection in France, citing slow sales of its products and difficult conditions in the IoT industry due to COVID-19.
He said he would use the process, which will initially last six months, to seek a buyer “to support the long-term development of Sigfox and offer to maintain the jobs”. It will continue its operations in the meantime: Sixfox claims that its network extends over 75 countries, combining the capacity of 75 operators, and that it connects 20 million objects and sends 80 million messages per day.
Details of the bankruptcy were outlined in a statement provided to TechCrunch by the company. The statement also noted that business was affected by a shortage of electronic components.
“The decision to place Sigfox under legal protection through this proceeding was made due to a slower-than-expected adoption cycle for its technology, despite effective shareholder support,” it read. “In addition, the IoT sector has suffered from the Covid-19 pandemic crisis, slowing down activity for two years and putting pressure on the electronic components market, which is currently in short supply. These combined factors have strongly impacted the financial situation of the company, in particular its level of indebtedness, which now makes it difficult to accelerate the development of Sigfox and its world-renowned technology in an increasingly competitive market.
Sigfox had raised over $300 million from a group of leading investors including Salesforce, Intel, Samsung, NTT, SK Telecom, energy groups Total and Air Liquide, and many others. When we last covered the company’s financing, a €150 million seed round in November 2016, it was valued at around €600 million ($670 million at today’s rates). today). A Company Profile a year later he described it as a “unicorn” – that is, valued at over $1 billion.
According to Sigfox’s press release, the receivership procedure was opened before the Toulouse Commercial Court at the request of the CEO, and it concerns both Sigfox and its French subsidiary Sigfox France. It will last for an initial observation period of six months, the notice states. (This advisory does not appear to appear on the company’s news pages, where the most recent update is from earlier this month and appears to imply the status quo, announces a partnership with two semiconductor companies to advance its networking solutions.)
“This procedure will allow the Sigfox group to continue all of its commercial activities to deliver to its customers and meet their needs, under the authority of principals appointed by the Court”, indicates the opinion.
For those watching the IoT market outside of Europe, and Sigfox in particular, this development shouldn’t come as too much of a surprise. As Chris points out in the French Tech magazine, the company’s auditors had issued a stern warning in September that year that the company must raise funds by the end of the year or risk insolvency.
This funding has yet to materialize.
Meanwhile, the company’s finances speak for themselves. Public account filings for the company note that over the last financial year, the company recorded a net loss of nearly 91 million euros on revenues of just over 24 million euros and financial debts of 118 million euros.
Sigfox was one of the biggest names in IoT to come out of Europe and its early and robust fundraising put it on the map among French startups trying to deliver breakthrough technology.
Sigfox emerged at a time when IoT was still a nascent concept, with few lucrative business models behind it, and much of the IoT business being driven by operators who viewed IoT as a business game. and a way to sell capacity on their established mobile networks.
Sigfox’s unique claim was not just that it was building an IoT network, but that it was going to do so on a new kind of concept to harness energy, make its networks and the devices connected to it, significantly more durable and efficient. As we noted at the time, this was part of a larger picture presented by the company’s director and founder, Ludovic Le Moan, of how Sigfox’s understanding of how power and communication was related to Simulation theory.
“[The simulation] is part of the vision I have, and I want Sigfox to be able to stay true to that,” he said at the time. “This world is virtual. Ultimately, we don’t live in the real world.
Le Moan parted ways with the company in February 2021, who will be replaced by Jeremy Prince, who is the current CEO.
Despite the financial difficulties of the company, it seems that there is a company here to save or save. Sigfox says its “low-cost, low-power technologies” currently span a global network owned and operated by 75 carriers (in other words, it appears to be assembling the capacity of several other carriers for its own virtual network). This network, it is said, covers a population of 1.4 billion people in 75 countries, and processes nearly 80 million messages per day generated by 20 million objects registered on its network. It says it has commitments from 5,000 customers to deploy 50 million objects in total.
We’ll update this post as we learn more.