After years of drama, more than $100 million in outside funding and a $500 million valuation, is London-based SpinVox about to bought for a mere $150 million by Nuance Communications? Nuance could announce a deal before Christmas, the Times Online is reporting, although Nuance declined to comment on “rumors and speculation.” The SpinVox blog hasn’t mentioned the story at all. Such a deal at that price would be a huge comedown for SpinVox and its investors.
SpinVox was formed in 2003 with the idea of transcribing people’s voicemails to text — something that’s now offered by several services such as Got Voice, SimulScribe and YouMail. In March 2008 it raised $100 million at a $500 million valuation from investors that included Charles Dunstone of Carphone Warehouse; institutional investors such as GLG Partners; Goldman Sachs; BlueMountain; Toscafund Asset Management; ABN Amro, Gartmore and Allen & Co. The valuation was based in part on SpinVox’s customer base of large carriers, which paid to deliver the service for a fee to their end users. This year it accepted a $48.8 million loan that it’s currently struggling to repay, which may have put more pressure on the company to sell.
Also in 2009, rumors that it used people rather than algorithms to transcribe some voicemails came to light. The media focused on the privacy implications of sensitive voicemails being read by people, but the financial world was looking at the impossibility of scaling out such a service. But dealing with people and speech-to-text services is something Nuance knows a lot about.
Nuance, which has several transcription and speech-recognition businesses, hires people to transcribe high-value documents such as legal briefs and doctor’s notes for a professional transcription service. It also has been aggressively pursuing patents and startups in the speech-recognition space, as it battles both Google and Microsoft as voice recognition grows from a niche market thanks to mobile phones. So a deal wouldn’t be surprising, and it’s possible that SpinVox’s carrier customers, a few good algorithms, and language databases are worth $150 million to Nuance.
Thumbnail image courtesy of whatleydude via Flickr; Domecq photo via SpinVox