The outlook for specialist IoT technology developer and network operator Sigfox has weakened following an exodus of senior employees this year and, according to a source close to the company, as financial difficulties mount.
Several management executives have left the French company in recent months in the wake of a power struggle between Ludovic Le Moan, the CEO and co-founder, and his former deputy Xavier Drilhon, according to a source close to the matter.
The Toulouse-based firm, whose technology provides network connectivity for smart meters and other devices that do not require much bandwidth, is in danger of running out of funding by June and may fall dramatically short of revenue targets this year, according to that source.
Sigfox generated just €30 million (US$36 million) in revenues in 2016 but has punched above its weight in the publicity game as one of a small number of players developing technologies that could potentially support billions of IoT device connections. (See Sigfox to Go Public in 2018 – Report.)
Backed heavily by French investment funds, Sigfox has previously raised a total of about $300 million, including €150 million ($179 million) from some high-profile investors this time last year. (See Sigfox Defies Critics to Raise €150M in Funding.)
But it is rapidly burning through those funds as it races to build networks and meet its payroll costs, which have risen sharply after a huge increase in staff numbers during the past two years, according to Light Reading's source.
The company is now understood to have more than 370 employees on its books, up from fewer than 200 about two years ago.
In the meantime, revenue growth appears to have fallen below expectations. Sigfox was said to be aiming for about €60 million ($72 million) in revenues this year but will probably end up with just half that amount, putting sales at roughly the same level as in 2016.
A separate source, who previously worked for a Tier 1 cellular operator that held discussions with Sigfox, told Light Reading he also believes the French company is struggling to stay afloat.
Le Moan and Drilhon are said to have fallen out over the company's long-term strategy, with Drilhon urging an overhaul of the current business model. Having joined Sigfox in mid-June 2015, he left the company in March this year.
In an exchange of LinkedIn messages with Light Reading, Drilhon confirmed that he left Sigfox because he had "different views from the founders on the way to organize the company." He declined to comment further for "professional" reasons.
Nevertheless, since his departure, several other management figures have also quit or been forced out, including: Thierry Siminger, the former president of Sigfox's Middle East and Africa business; Remy Lorrain, previously vice president of operations and networks; Stuart Lodge, who was the executive vice president of global sales; and Thomas Nicholls, the erstwhile head of communications.
Siminger also responded to LinkedIn messages from Light Reading, confirming that he left Sigfox in May "on a major disagreement with the top management on the company strategy." Like Drilhon, he would not discuss the matter further, citing "ethical" reasons.
At the time of Siminger's departure, Sigfox suggested that he would not be replaced. "A team of regional directors has taken the leadership in Africa and the Middle East to pursue the expansion of Sigfox's global network in this strategic region," said a company spokesperson in an email sent to Light Reading. (See Sigfox MEA President Hits the Road, Jacques.)
While Lorrain, Lodge and Nicholls did not respond to Light Reading's approaches, all have updated their LinkedIn profiles to show a change in employment status.
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