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

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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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AI transcription company becomes unicorn

A transcription and captioning company is the latest to join the unicorn club. Verbit, which has developed an AI-centered speech-to-text process that’s highly accurate, has closed a Series D worth $157 million on a valuation in excess of $1 billion.

“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 for this $30 billion industry and has further driven Verbit’s already-rapid development,” said Tom Livne, CEO and Founder of Verbit. “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.”

The company’s total funding is now over $250 million, perhaps a surprising vote of confidence for a company that focuses on the surprisingly mundane (and heretofore largely human-powered) task of translating speech to writing.

If that sounds simple, it’s not. Spoken language is incredibly difficult for a machine to interpret accurately. The rise of voice recognition technology and the power of machine learning to parse spoken language with help from immense datasets has helped Verbit make important advances. AI-only transcription is still far from perfect, but companies are increasingly relying on AI for a first pass at transcribing audio.

As we recently reported, Verbit has been making moves to corner the market through acquisition. Verbit recently acquired VITAC, a company focused on communication accessibility via captioning, which is responsible for captioning hundreds of thousands of programming hours each year, with clients including every broadcast company and most cable networks, as well as Fortune 1000 Corporations, educational institutions, and government agencies.

That broad customer base points to the prolific market for transcription and captioning services, which helps explain Verbit’s eye-popping valuation. Verbit has seen 6x year-over-year revenue growth and close to $100 million in annual recurring revenue.

“With their hybrid transcription platform bringing together innovative technology and a network of over 30,000 transcribers, Verbit has forged a winning combination of AI and human intelligence,” said Jai Das, president and partner at Sapphire Ventures. “The company has had unparalleled growth akin to some big, well-known companies out there and we’re very impressed by the team’s ability to achieve a unicorn valuation in just four years. We’re looking forward to continuing to be part of this exciting journey with Verbit.”

Originally posted on zdnet.com.

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