Sponsored By

Sigfox in Peril as Senior Execs Exit – Sources

The French IoT player has lost a number of senior managers this year following a bust-up with the CEO about company strategy.

Iain Morris

November 28, 2017

6 Min Read
Sigfox in Peril as Senior Execs Exit – Sources

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.

Figure 1: Power Struggle Ludovic Le Moan, CEO and co-founder of Sigfox, is said to have clashed with some senior executives over company strategy. Ludovic Le Moan, CEO and co-founder of Sigfox, is said to have clashed with some senior executives over company strategy.

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.

Next page: Sigfox hunting

Sigfox hunting
Sigfox has previously taken flak for its tight control of the technology ecosystem. It has also been criticized for demanding a huge cut of service revenues from partners running Sigfox-based networks.

To others, the company has simply tried to go too far too fast. Instead of concentrating on a small number of geographical markets and industry sectors, Sigfox has appeared determined to develop a global capability meeting a diverse range of needs, even when its technology has looked ill suited to the task. Some of its previous activities have met with a customer backlash, as Light Reading has already reported. (See Sigfox Said to Face Customer Backlash.)

If Sigfox cannot find additional funding to pursue its current strategy, one possibility is that it gets acquired by a much bigger technology company interested in its intellectual property.

The company claims that its technology gives it a huge cost advantage over rival developers of so-called low-power, wide-area (LPWA) networks. Using unlicensed spectrum, its chips can provide connectivity in some markets for as little as $1 per device per year, according to earlier reports. It currently provides connectivity in more than 36 countries and plans to increase that number to as many as 60 during 2018. It was previously said to be considering an initial public offering next year, but this would be unlikely to happen unless sales were growing significantly. (See Sigfox to Go Public in 2018 – Report.)

Want to know more about the Internet of Things? Check out our dedicated IoT content channel here on Light Reading.

Sigfox's main technology challenge comes from another unlicensed-spectrum technology called LoRa, whose supporters boast a more "open" ecosystem and business model, as well as emerging cellular standards NB-IoT and LTE-M.

While some of the world's biggest service providers have embraced LoRa as well as the cellular options, Sigfox appears to have won limited backing from any telecom operators.

Although Spain's Telefónica and European cable group Altice have both announced deals with Sigfox, neither is making significant use of the Sigfox technology in production networks, according to Light Reading's sources. (See Telefónica Opens IoT Door to Sigfox and Sigfox 'Only Option' Today, Says Telefónica.)

Sigfox has also been accused of inflating the number of connections on its networks in official statements, basing the figure on the numbers in signed contracts instead of "active" connections.

The bust-up between senior management figures mirrors recent developments at Ingenu, another LPWA company with similar ambitions that lost industry veteran John Horn as CEO in the summer.

Formerly an executive at T-Mobile US, Horn quit the IoT specialist after its board rejected his requests for additional funding to establish Ingenu as a global player, according to two sources familiar with the matter.

A senior executive who still works for Sigfox declined to provide a comment for this story. Sigfox's press office did not respond to Light Reading's approach for comment.

— Iain Morris, News Editor, Light Reading

Read more about:

Europe

About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like