Sigfox targets 2018 IPO

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Sigfox, the French low-power wide-area network (LPWAN) provider, is planning an initial public offering (IPO), CEO Ludovic Le Moan told the Financial Times (FT) in an interview.

The former network startup continues to mature and raise new capital to build out its networks, but could face some challenges once 5G becomes a connectivity option for the IoT.

In the interview, Le Moan acknowledged the company’s completion of its latest Series E funding round, in which it raised 150 million euros, and added that the company has raised about 300 million euros in total.

Sigfox likely needs access to new capital, as it maintains a cable-intensive business model in order to quickly build out its networks. Unlike other IoT network providers that utilize existing networking infrastructures, such as cellular base stations, Sigfox needs to build out new network infrastructure. Further, the company has ambitious plans to expand its networks, which could make new capital necessary. Le Moan told the FT that Sigfox plans to expand from the 26 countries it's currently active in to 60 in the next 18 months. To achieve this, the company likely needs additional funding, and opening itself up to the general investing public could help.

But going public could also end the company’s rapid growth at a time when it still needs to continue to ramp up its operations. Sigfox has grown rapidly thus far, and its recent Series E funding round is the latest indication of this. However, after its initial influx of capital from the IPO, investment coming in could slow, making it difficult for the provider to finance its rapidly growing operations. Further, the LPWAN provider could be pushed to begin generating profit from its networks before they're fully developed and are widespread enough to fully enable the advantagesof LPWANs. 

Sigfox could soon face challenges with the development of 5G as an option to connect IoT devices. 5G is currently in the early stages of trials across the globe, but could arrive as soon as 2017. When it does arrive, IoT networks could move toward the network standard in order to eliminate fragmentation and ensure that most IoT devices run on a single type of network. Further, 5G can handle more data than traditional 4G LTE cellular connections, meaning that it could be ideal for IoT solutions that have thousands of devices all generating data. Sigfox may need to increase its availability and find a way to substantially differentiate itself from 5G.

Although Wi-Fi and cellular networks can connect IoT devices to the internet, they have inherent characteristics that make them ill-suited to do so for small, low-power components like sensors, smart locks, and smart lights.

BI Intelligence expects that more than 24 billion IoT devices will be installed globally in 2020, and the vast majority of these will fall into the small, low-power category.

So networks that are better suited to connect these low-power IoT devices — notably,Low Power Wide Area Networks (LPWANs) — are being developed. These networks can connect devices over large geographic areas because of their long range, but use less battery power on the devices they connect and offer cheaper data subscriptions than traditional cellular networks. Interest in LPWANs among IoT providers and end users is growing in response to the opportunities these benefits present. For example, a municipality deploying parking sensors for a smart transportation project could lower its costs by using a LPWAN instead of a cellular network. It would also then be able to replace the batteries on the sensors far less frequently.

BI Intelligence has compiled a detailed report on LPWANs that explains the impact they will have on the growth of the IoT and the benefits of using LPWANs for IoT connections. It also forecasts the internet connections and subscription revenues associated with these networks and explains in detail the many standards for LPWANs that exist today. Finally, it lays out the current market landscape going forward as different network providers launch LPWANs.

Here are some of the key takeaways from the report:

• Low Power Wide Area Networks are specifically designed for connecting low-power devices like sensors over a very long range. This makes them well suited to a wide range of IoT use cases like smart agriculture and smart cities.
• Low Power Wide Area Networks can connect these low-power devices at a cheaper cost than existing cellular networks. LPWANs have cheaper hardware costs and data subscription costs because they don’t need to provide the high data rates that cellular networks do.
• BI Intelligence estimates that the total number of IoT devices connected over LPWANs will reach 700 million by 2021. This represents remarkable growth for such a new technology that has little present adoption.
• A number of startups and new networking providers are launching LPWANs using standards that leverage unlicensed spectrum. These providers are trying to secure networking revenues from the billions of low-power IoT devices that will go online over the next few years.
• Cellular network carriers are responding to this trend by developing their own standards for LPWANs that leverage their existing infrastructure that supports their 4G networks. This means they will be competing directly with some of the new providers mentioned above.
• Different LPWAN standards are best suited for specific use cases, and business and government organizations will need to understand the benefits of the various standards to find the solution that fits their needs.

In full, the report:

• Details the broad need for low-cost, low-power internet connectivity for IoT devices that LPWANs will help meet.
• Forecasts the growth of the LPWAN market including new networking providers and traditional mobile carriers that are launching their own LPWANs.
• Examines how LPWANs will be adopted by different industries that are launching IoT projects.
• Compares the distinct characteristics and advantages of different standards for LPWANs.
• Explains how the LPWAN market will develop over the coming years in regards to different standards and competitors.
• Examines what the future of internet network connectivity for IoT devices will look like, including LPWANs and the coming of 5G mobile networks.

To get your copy of this invaluable guide, choose one of these options:

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The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of LPWANs.