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Verbit raises $31 million for human-in-the-loop AI transcription tech

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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. And Tom Livne, who cofounded Verbit.ai with Eric Shellef and Kobi Ben Tzvi in 2017, asserts the Tel Aviv and New York-based startup will contribute substantially to the segment’s rise. Verbit’s adaptive speech recognition tech, which can generate detailed transcriptions with a claimed over 99% accuracy, recently attracted the attention of VCs that include Vertex Ventures and Oryzn Capital, both of which participated in the startup’s $23 million series A round. Now, roughly a year later, Verbit hopes to lay the groundwork for growth with an infusion of fresh capital.

Verbit today announced the close of a $31 million series B round at double its previous valuation. The round was led by New York-based equity growth firm Stripes, with participation from Viola Ventures, Vertex Ventures, HV Ventures, Oryzn Capital, and ClalTech. It brings the company’s total raised to $65 million, and Livne says it will enable Verbit to expand its products’ language support and further develop its speech recognition technologies as it triples the headcount in its New York office this year.

“When I established Verbit [three] years ago, I didn’t anticipate we would become one of the market-leading companies in our industry so quickly,” said Livne, who added that revenue has tripled in the past year. “This latest financing round is an important milestone in Verbit’s journey and strengthens the incredible momentum we had in 2019. The collaboration with Stripes is a great indicator of Verbit’s category-leading product and will allow us to continue innovating in the market.”

Voice transcription and captioning isn’t novel — it’s a decades-old venture with well-established players, like Nuance and Google. Enterprise platforms such as Microsoft 365 offer AI-powered speech-to-text, along with Cisco and startups like Otter and Voicera.

But what sets Verbit apart is its reliance on “cutting-edge” advances in machine learning and natural language understanding, according to Livne.

Three models — acoustic, linguistic, and contextual — inform Verbit’s captioning. They filter out background noise and echoes and identify speakers regardless of accent, and they detect domain-specific terms while incorporating current events and updates. Clients first upload audio or video files to a cloud dashboard for processing. Then a team of over 15,000 human freelancers in over 20 countries edits and reviews the material, taking into account customer-supplied notes and guidelines. The finished transcriptions are available for export to services like Blackboard, Vimeo, YouTube, Canvas, and BrightCode.

Verbit’s web frontend shows the progress of each job and lets users edit and share files or define the access permissions for each and add inline comments, request reviews, or view usage reports. A forthcoming feature — Verbit Express — will allow them to drag files in need of transcription to a folder on a desktop PC, where they’ll be automatically uploaded and processed.

The transcriber side of the equation is a self-serve and on-demand affair. Verbit transcribers can choose the files they’d like to work on — the platform doesn’t assign them manually —  and take advantage of built-in dictionary and research tools, keyboard shortcuts, speed control, a highlighter, and spell check. Those who consistently produce exceptional work and achieve high quality scores are offered the chance to become reviewers, responsible for proofreading — and editing, if necessary — transcribers’ work.

Livne claims the platform can reduce operating costs by up to 50% and deliver results 10 times faster than the competition. In any case, it was enough to woo a healthy client base of over 150 educational institutions and commercial customers (up from 70 as of January 2019), including the NCAA, London Business School, Fashion Institute of Technology, Utah State University, University of Utah, University of Southern Utah, University of Vermont, Auburn University, Western Governor University, University of California at Santa Barbara, Oakland University, Stanford, Coursera, Udacity, Panopto, Kaltura, and close to 100 others (up from 50 in May 2018).

Customer have to make a minimum commitment of $10,000, a pricing structure that apparently paid dividends. Verbit.ai isn’t disclosing exact revenue but says it’s in the “millions” and that the company is cash flow positive.

Verbit plans to 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. “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,” said Stripes partner Saagar Kulkarni, who intends to join Verbit’s board of directors. “We are big believers in the power of AI to fundamentally change business models and provide critical services better, faster, and more affordably.”

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Legal Tech Transcription Platform Verbit Raises $31 Million More

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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