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AI-powered transcription startup Verbit raises $157M

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Verbit today announced the close of a $157 million series D round the company says will bolster its product R&D and hiring efforts. CEO Tom Livne, who noted that the raise brings the company’s post-money valuation to more than $1 billion, said the capital will also support Verbit’s geographic expansion as it prepares for an initial public offering.

The voice and speech recognition tech market is anticipated to be worth $31.82 billion by 2025, driven by new applications in the banking, health care, and automotive industries. In fact, it’s estimated that one in five people in the U.S. interacts with a smart speaker on a daily basis and that the share of Google searches conducted by voice in the country recently surpassed 30%.

Livne, who cofounded Verbit.ai with Eric Shellef and Kobi Ben Tzvi in 2017, asserts that the New York-based startup will contribute substantially to the voice transcription segment’s rise. “The transcription market has been ripe for innovation. That’s the initial reason why I founded Verbit. The shift to remote work and accelerated digitization amid the pandemic has been a major catalyst … and has further driven Verbit’s already-rapid development,” Livne said in a press release. “Securing this new funding is yet another milestone that brings us closer to becoming a public company, which will further fuel our expansion through strategic acquisitions and investments.”

AI-powered technology

Verbit’s voice transcription and captioning services aren’t novel — well-established players like Nuance, Cisco, Otter, Voicera, Microsoft, Amazon, and Google have offered rival products for years, including enterprise-focused platforms like Microsoft 365. But Verbit’s adaptive speech recognition tech can generate transcriptions it claims deliver over 99.9% accuracy.

Verbit customers first upload audio or video files to a dashboard for AI-guided processing. Then a team of more than 33,000 human freelancers in over 120 countries edits and reviews the material, taking into account customer-supplied notes and guidelines. Finished transcriptions from Verbit are available for export to services like Blackboard, Vimeo, YouTube, Canvas, and BrightCode. A web frontend shows the progress of jobs and lets users edit and share files or define the access permissions for each, as well as adding inline comments, requesting reviews, or viewing usage reports.

Customers have to make a minimum commitment of $10,000, a pricing structure that has apparently paid dividends. Annual recurring revenue grew 6 times from 2020 despite pandemic-related headwinds, according to Livne, and now stands at close to $100 million.

Rapid growth

Verbit’s suite has wooed a healthy client base of over 400 educational institutions and commercial customers (up from 70 as of January 2019), including Harvard, the NCAA, the London Business School, and Stanford University. Following its recent acquisition of captioning provider VITAC, Verbit claims it’s the “No. 1 player” in the professional transcription and captioning market as it supports more than 1,500 customers across the legal, media, education, government, and corporate sectors. Clients include CNBC, CNN, and Fox.

Verbit plans to add 200 new business and product roles and explore verticals in the insurance and financial sectors, as well as media and medical use cases. To this end, it recently launched a human-in-the-loop transcription service for media firms with a delay of only a few seconds. And the company inked an agreement with the nonprofit Speech to Text Institute to invest in court reporting and legal transcription technologies.

Sapphire Ventures led Verbit’s series C round, with participation from Third Point, More Capital, Lion Investment Partners, and ICON fund, as well as existing investors such as Stripes, Vertex Ventures, HV Capital, Oryzn Capital, and CalTech. This brings the four-year-old company’s total capital raised to more than $250 million, following a $60 million series C in November 2020.

Original article can be found at https://venturebeat.com.

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Israeli transcription company Verbit raises $157 mln, eyes 2022 listing

Tel Aviv-headquartered transcription company Verbit said on Tuesday it had raised $157 million in its latest funding round, pushing its valuation to more than $1 billion before a potential public listing next year.

Established four years ago, Verbit uses artificial intelligence to provide automated transcription services including to media companies, courts and universities.

Chief Executive Tom Livne told Reuters the Series D funding would help finance acquisitions of transcription companies, develop new products and hire 200 staff, including personnel tasked with preparing for the listing.

“We have our unique acquisition strategy that we are mainly acquiring legacy transcription businesses. We are going to keep executing and actually doubling down,” he said by phone.

Series D round for startups is generally for financing a special situation, such as a merger or acquisition.

Verbit, which says it is generating close to $100 million in annual revenue, announced in May it had acquired Vitac, whose website says it is North America’s largest captioning provider.

Livne said, based on Verbit’s current growth trajectory, the company could be generating almost $200 million in annual revenue by the time of a potential listing in the second quarter next year.

Technology company valuations have soared over the past year as investors bet more economic activity will become digitally automated and shift online as a result of the pandemic.

Livne said the company would most likely pursue a “traditional” listing but was also considering going public through a special-purpose acquisition company (SPAC), a blank-check firm that seeks to merge with a privately owned entity.

He said a listing could be pushed back in favour of another private funding round, saying the company could be worth as much as $3 billion by mid-2022.

Investors in the latest funding round included Sapphire Ventures, Third Point, Oryzn Capital and Viola Ventures. Verbit says it has raised $250 million in funding to date, including debt.

Originally posted on reuters.com.

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