This failed deal that precipitated the downfall

“It is wrong to be right too soon.” This quote from Marguerite Yourcenar couldn’t be more relevant to economics. It sums up, unfortunately well, Sigfox’s setbacks. The former French star of the Internet of Things, due to a lack of liquidity, was placed on Wednesday in receivership. Founded in 2009, this Toulouse-based startup has been a pioneer. It has developed before anyone else a technology that allows to connect a myriad of objects, thanks to low-cost and energy-efficient sensors. Its goal: to enable companies, by connecting their assets, to revolutionize their industrial operations, their logistics, as well as launch new services with significant savings.

But mayonnaise did not take. At least not as expected. Sigfox may have arrived too soon, and may have underestimated how long it would take manufacturers to adopt this type of solution. In its press release, the group acknowledged: The decision to put Sigfox under legal protection came due to a slower-than-expected adoption cycle for its technology. » While in 2019, Sigfox still relied on a billion objects connected to its network, today it only has about 19 million. Suffice it to say that we are far, far from the mark.

unbearable financial situation

Financially choked, and failing to reach economic balance, Sigfox gave itself some breathing space in September 2020 by selling its network in Germany to Cube Infrastructure investment fund. A few months later, a big sweep hit the group. Sigfox has hacked its workforce. It has gone from 400 employees to 250 today. Above all, Ludovic Le Moine, his token boss, was asked to give up his loincloth. He was replaced by Jeremy Prince, former president of Sigfox USA, and member of the Executive Committee.

A few weeks ago, this appeared in an interview with exhibitionResolutely optimistic about the future of the group. Even if it was published in 2020, according to our information, the loss amounted to more than 90 million euros compared to 24 million euros. All this combined with a debt of 153 million euros. Jeremy Prince’s strategy has been basically squeezing his teeth, waiting for the Internet of Things market to take off. And so Sigfox finally makes a profit. But to hold, Sigfox desperately needed to sell its French network, Sigfox France SAS, which was also placed in receivership. According to our information, the buyer has positioned himself. But he failed. Without this windfall, Sigfox found himself back at the wall, precipitating his downfall.

The economic context and the health crisis didn’t help either. In its press release, Sigfox points out that “The IoT sector has been marked by the Covid-19 crisis which has slowed down activity over the past two years”. The group also experienced another crisis: the semiconductor crisis “A market for electronic components has been short of months”.

Internet of things market consolidation?

Now, Sigfox is looking for a buyer. A six-month renewable probation period now begins. The receiver should help the group identify potential buyers. Who might be interested? Perhaps a competitor to Sigfox. Besides the Toulouse group, there are other similar technologies, such as LoRa or NB-IOT. Selling Sigfox could be an opportunity to consolidate the market, as Jeremy Prince already envisioned over a month ago. to me exhibitionHe said he was convinced “No matter what happens, Sigfox technology will always be there because it is essential for certain use cases”. “Even in the worst case.”he added, This technology will remain through consolidation. » The next few months will be crucial for the group’s future.