French IoT developer is planning an initial public offering in the next couple of years but says it needs to have 100 million devices on its network before this happens.

Iain Morris, International Editor

December 5, 2016

4 Min Read
Sigfox to Go Public in 2018 – Report

French Internet of Things developer Sigfox is planning to hold an initial public offering (IPO) in 2018, according to an update from the UK's Financial Times newspaper.

The company, whose technology supports very low-cost wireless connectivity, raised €150 million ($160 million) in a funding round last month and now claims to have attracted around €300 million ($319 million) altogether from investors including the French government, and energy giant Total. (See Sigfox Defies Critics to Raise €150M in Funding.)

Sigfox faces competition from other companies and technologies targeting the market for low-power, wide-area (LPWA) network services but says its revenues have risen from more than €12 million ($12.8 million) last year to more than €30 million ($31.9 million) in 2016.

It plans to expand coverage from 26 to 60 countries in the next 18 months and will use most of the €150 million ($160 million) it recently raised to deploy 30,000 basestations across the US, according to the Financial Times.

CEO Ludovic Le Moan has reportedly said that Sigfox needs to have about 100 million devices on its network -- up from just 10 million today -- before an IPO is feasible.

The company generates as little as $1 annually from each connected device, giving it an advantage over pricier technologies but making it heavily dependent on a volume increase for revenue growth. It is now targeting sales of more than €100 million ($106 million) in 2018, according to the latest report.

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

Despite Le Moan's bullishness, Sigfox's prospects look uncertain with the recent arrival of NB-IoT and the growing momentum behind LoRa, two alternative LPWA technologies. (See Vodafone Ireland to Launch NB-IoT in Jan 2017.)

Both Sigfox and LoRa, which use unlicensed spectrum to support connections, have grown in the absence of a low-cost cellular alternative. But NB-IoT, which is set for widespread rollout next year following its inclusion in the 3GPP's Release 13 in June, is aimed at filling this cellular gap.

Sigfox and LoRa claim to be more power-efficient than NB-IoT and believe they can play a "complementary" role, and yet NB-IoT appears to be targeting many of the same opportunities.

Interestingly, the operators making use of unlicensed-spectrum technologies have had less to say about NB-IoT than they have about LTE-M, another 3GPP-backed technology that supports higher-speed IoT connections. South Korea's SK Telecom (Nasdaq: SKM) and KPN Telecom NV (NYSE: KPN) of the Netherlands, for instance, are currently building an IoT strategy around the use of LoRa and LTE-M. (See KPN to Include LTE-M in IoT Mix in 2017 and SK Telecom Sees LTE-M, LoRa as Its 'Two Main IoT Pillars'.)

Meanwhile, Vodafone Group plc (NYSE: VOD), arguably NB-IoT's biggest backer, has argued that NB-IoT will "crush" Sigfox and LoRa as it is rolled out next year. Sweden's Telia Company has also said it is "betting" on NB-IoT over LoRa and Sigfox. (See Vodafone to 'Crush' LoRa, Sigfox With NB-IoT and Telia 'Betting' on NB-IoT Over LoRa, Sigfox.)

In the short term, however, the unlicensed-spectrum options are likely to have a big cost advantage over NB-IoT. On the hardware side, for example, Sigfox previously told Light Reading that it reckons the silicon cost of adding NB-IoT to an end point will drop from about $40 today to around $5 in the next five years. Over that period, it expects its own comparable costs to fall from $2 to just $0.50. (See Sigfox Said to Face Customer Backlash.)

Many cellular operators are naturally drawn to NB-IoT because it allows them to reuse existing cellular systems. But a spokesperson for the LoRa Alliance , an association that promotes LoRa technology, says rolling out a LoRa network from scratch costs about the same as upgrading a mobile network with software to support NB-IoT. (See Is LoRa Going Licensed?)

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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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).

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