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Legal Tech Transcription Platform Verbit Raises $31 Million More

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The fast-rising artificial intelligence-powered transcription program Verbit has received a $31 million venture capital boost, the company announced Wednesday, bringing its total investments to $65 million since the startup launched in 2017.

The Series B funding round was led by the private equity firm Stripes. Previous investors such as Viola Ventures, HV Ventures, Oryzn Capital, Vertex Ventures, and Claltech also participated in the round.

More than 150 customers in legal services and higher education now use Verbit, including court reporting services and universities such as Harvard and Stanford, the company’s co-founder and CEO Tom Livne told Bloomberg Law.

The new funding round “is a great vote of confidence in what we’re building here at Verbit,” said Livne.

Verbit, an Israeli-founded startup that opened an office in New York last year, will use the investment to accelerate its already fast growth, including by continuing to innovate its speech recognition technology, said Livne.

Though the program is now about 90% accurate, he said, it can and will push closer to 100%—in large part through the corrections and other feedback provided from Verbit’s stable of 15,000 freelancers in more than 30 countries. They listen or watch audio and video files and compare them with Verbit’s AI-enabled transcriptions, for example, double-checking for accuracy.

The need for speedier court reporter transcriptions—as well as an ongoing shortage of about 5,000 court reporters in the United States—has provided an opening for Verbit.

The company has grown quickly—including more than tripling its revenue in the past year, Livne said—though he declined to say what the company earned in 2019. Verbit employs about 100 people, not to mention its crew of freelancers. He said he expects the staff of 11 in New York to triple in 2020.

Livne said his team made a strategic decision to sell primarily to court reporting companies instead of law firms because firms often contract with court reporting services anyway to transcribe depositions, for example.

Universities are using Verbit in part by having the company transcribe lectures for hearing-impaired students, in order to comply with the Americans With Disabilities Act (ADA), he said.

Verbit aims to become a $100 million company in four years’ time, said Livne. A number of businesses could use its services, he said, from finance and insurance corporations to media. It’s now a matter of determining which field, or fields, to pursue next.

“We are thrilled to partner with Tom and the rest of the Verbit team on their mission to build the leading AI-powered transcription and captioning platform,” Saagar Kulkarni, a Stripes partner who will join Verbit’s board, said in a statement. “We are big believers in the power of AI to fundamentally change business models and provide critical services better, faster, and more affordably.”

To contact the reporter on this story: Sam Skolnik in Washington at sskolnik@bloomberglaw.com.

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Transcription firm Verbit eyes new languages with $31M funding round

AI-powered transcription company Verbit on Wednesday announced it has received a $31 million round of Series B funding that will allow it to expand its offerings.

The company’s technology, which uses machine learning to recognize human speech and transcribe it in real time or from a media source, is used by more than 150 organizations, including legal groups, media companies and higher education institutions such as Harvard and Stanford, according to the company. This new funding, the company’s executives told EdScoop, will allow them to offer their products to other industries, and also add new languages while improving the technology.

Verbit’s Scott Ready said that while speech-recognition and transcription technology is traditionally considered within education to be of primary use for students who are hard of hearing or deaf, including transcriptions of live presentations, or of audio and video content, can benefit all students.

“Research has proven that captioning and transcription benefits all students,” Ready said. “So when you are looking at how technology can come in to reduce costs and increase accuracy, then you’re looking at changing captioning and transcription from an accommodation feature to a learning feature.”

Transcription is a tedious and resource-intensive process, which has made it a prime target for software developers in recent years. Verbit, which is based in Tel Aviv, Israel, is joined in the market by a host of other companies using speech recognition technology, such as Amira Learning, Soapbox Labs and Bamboo Learning, all of which raised venture funding last year.

“The technology allows us to provide a service that people are in need [of], and there are not enough people that are available to provide that service,” said Verbit executive Jacques Botbol. “And the technology is an enabler of that.”

Verbit’s Series B funding round was led by the New York-based growth equity firm Stripes, adding to the company’s existing investors: Viola Ventures, Vertex Ventures, HV Ventures, Oryzn Capital and ClalTech. The company’s total funding is now $65 million after a $23 million Series A round in January 2019.

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