Spinvox swallowed by Nuance; early investors lose shirts

Having been the vanguard of voice recognition, UK-based Spinvox has been sold to rival Nuance Communications for US$102 million. The deal will mean huge losses for many of its UK shareholders - including Goldman Sachs and Carphone Warehouse, who are likely to receive very little of their initial investment.

The company, once feted by the press and scooping numerous technology and innovation awards, has more recently become mired in financial woes and reports that its technology was not performing as promised. The company was accused last year of using call-centre staff, rather than its software, to assist in the translation of voicemail messages into text.

Spinvox's financial performance was also less than pretty with its most recent accounts (2007) detailing losses of £30 million on revenues of £2 million. The company had also been forecasting sales of around £7 million for 2010, but with zero profit.

Commenting on the move, Rich Green, exec VP of Nuance's mobile and enterprise division, said that the company was confident of being able to turn the Spinvox business around by integrating Nuance's more advanced voice-recognition technology - indicating that it planned to drop Spinvox's technology. "The Holy Grail for the industry is to get 100 per cent automation and we are well placed to do that," Green said.

Despite the scorn being heaped on Spinvox now, the company had managed to convince more than 30 celco operators, including Alltel, Bell Mobility, Rogers Wireless, Telus, Optus, Vodacom, Vodafone Spain, Telstra, Skype and all of Telefonica's Latin American businesses, that the technology worked and could provide real value.

For more on this story:
Financial Times

Related stories:
Spinvox in play for 100m British pounds as suitors circle
SpinVox raises $100M from Goldman, no IPO     
First SpinVox-Powered Application launches on Apple App Store
On the Hot Seat with Christina Domecq, CEO of SpinVox

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