Nuance Buys SpinVox for $66 million in Cash (Plus Stock)

Nuance has acquired SpinVox to "accelarate its voice to text business." According to the release the transaction was worth $102 million with a third of that coming in Nuance common stock. From the release:

As the estimated number of operational voicemail boxes in the world has passed one billion, and consumer and corporate activity now generate over 150 billion voicemails a year, Nuance and SpinVox have experienced strong interest in voice-to-text automation. The two companies helped pioneer solutions that utilize speech recognition and transcription workflow solutions to convert voicemails into text that can be sent to users as SMS or email messages. This transaction marries innovative speech solutions and robust carrier-grade infrastructure to accelerate innovation, and deliver these voice-to-text services to global subscribers.

And from the SpinVox blog:

Okay, so what does this mean? Without question there is an accelerating demand from carriers, consumers and enterprises for robust speech-enabled services and automated voice-to-text platforms – in fact, SpinVox already services nearly 100 million users worldwide. With that in mind, Nuance will leverage SpinVox’s carrier-grade voice-to-text infrastructure, network product portfolio, multi-language support and experienced UK-based development teams to further drive and accelerate adoption of voice-to-text around the world.

This is great news for customers who will benefit from both the technology strength and superior product and services delivery. There will be more services, more applications, highly accurate voice-to-text transcription and the best delivery platform available – no matter where you are in the world!

SpinVox a year ago in March obtained $100 million in a massive funding round and more than $200 million in total. The company was rocked by scandal when it appeared that most of the speech-to-text transcription was done by humans and not by machine, as had been claimed. 

The company had an outstanding £30m ($48.2 million) loan that it was having difficulty repaying. 

While this is obviously not the outcome SpinVox envisioned a couple of years ago, Nuance picks up a valuable addition to its suite of enterprise and consumer voice applications, a range of existing clients and a large installed base of users. 

Dan Miller's comments:

I had povided my thoughts on the SpinVox acquisition last week. I called it a coup for Nuance, but I also see it as an important development for incumbent telcos. Transcription of voice messages extends the life of existing voicemail platforms and is the missing link in the evolution messaging services that prove their value to end-users by going well-beyond simple “message waiting” notifications to the delivery of complete messages as email or SMS texts. This breaks down long-standing boundaries between voicemail and email, and transforms the telephones role in message origination.

SpinVox had taken considerable heat for its decision to involve live agents in the “disambiguation process” required for accurate rendering of spoken words. Yet, to me, this is yet another flavor of the high-tech-plus-high-touch combination that make real-time services truly useful. Both Nuance and SpinVox have placed a premium on accurately rendering voicemail messages. It was a tactical choice and a differentiator, especially against Google Voice (which is thought to be 100% automated).

As I say repeatedly (often with accurate rendering) 100% accuracy in transcribing voicemail is a pipe dream. Both human-aided and totally automated systems are notorious for their failures to recognize such things as street names and other proper nouns, and that situation is unlikely to improve. But this failure, in and of itself, creates the seeds for stronger bonds between people who send or receive messages from one another.

Admittedly, this is not like cracking “The Da Vinci Code”, but there are game like qualities to figuring out some of the messages that are received as spoken words and rendered as text messages. In most cases, the meaning comes across loud and clear. Besides, as is true with applications from Nuance (Voicemail2Text) and SpinVox (in many flavors) recipients can listen to MP3 files of the messages as attachments to the email or links to the SMS text. The value of text-based delivery is undeniable, as is the high probability that at least one of the words or phrases will be inaccurate [I'm going to address this phenomenon in a CATScan called "The end of 5 Nines... Hallalujah!"].

Combine the factors mentioned above and you’ll understand why it is more important than ever for Nuance to expand the potential user base for its voicemail-to-text services. Google has gone full-speed ahead with notoriously inaccurate voicemail-to-text rendering deeply embedded in its Google Voice services. At this point, accuracy is not the issue (though it is important to be as accurate as possible); global reach is the objective. SpinVox’s contracts with global carriers is very important to both Nuance and the carriers, themselves, as they prepare to compete with Ma Google (the Search Giant as Telco).

It’s also a potential win for end-users. As Google has so often proven, accurate treatment (of search queries or spoken utterances) improves with volume. The combination of Nuance and SpinVox can create the critical mass of users required to result in a highly-accurate service while, at the same time, posing formidable competition to Google Voice.