It took a little more than a week, but June also produced a new member to the Unicorn club. This time, it’s Verbit’s turn - announcing today (Tuesday) the closing of a $157 million Series D funding round. The investment propels the post money valuation of the 4 year old company above the billion dollar mark. Verbit CEO and co-founder Tom Livne tells Geektime about the startup’s plans for the future (“Currently working very hard on developing products that will go beyond transcribing”); the balance between the company’s algorithm and human transcribers (“I still don’t see a scenario, where automation takes over completely”); the employees, who can now sell their options (“some people here are going to be rich”); and the potential IPO.

Verbit develops an audio transcription platform for a variety of sectors, including legal, educational, business, media, and more. New automated transcription technologies may be innovative and sophisticated, however, we all know that they’re not 100% accurate. One of the main reasons that Verbit incorporates another layer review, deploying a team of over 30,000 human transcribers, who provide support to the automation technologies. This way, the company offers high accuracy and a quick turnaround, as well as using the human transcriber corrections to train the company's algorithm.

Recurring revenue of $100M, and something for company veterans

Today, the company announces a $157 million funding round, led by Sapphire Ventures, with participation from Third Point, Mor, Vertex Growth, ICON Fund, Lion Investment Partners, Viola Ventures, Oryzn Capital, HV Capital, Stripes, Vertex Ventures, and ClalTech. Counting the current round, the company has raised $250 million to date. According to the company, revenue increased x6 in 2020, with an ARR of around $100 million.

In an interview with Geektime, CEO Tom Livne notes that the company has recruited a veteran HR Director, alongside merger and acquisition managers. “We won’t stop, we continue with our strategy,” and true enough, about a month ago, the Israeli Unicorn announced the acquisition of VITAC, an American subtitle startup. This opened the door for Verbit into the worlds of media and live transcription. Among the company’s customers, we find giants like CNN, Fox, Harvard University, Cultura, and 1,500 more.

According to Livne, the newly invested $157 million will go directly into the company’s bank, and a secondary deal, where employees can sell some of their stake in the company, is on the books. “Some people here are going to be rich,” says Livne. “Especially the company veterans, who have been with us since the company’s first days. I’m happy for them, and thank them for giving everything to cement our position as a leader in the industry.”

Isn’t there a clash between, a company developing automation for transcription, with users who work in transcription. Doesn’t this contradict itself?

Livne: “Our transcribers are unequivocally important. There are many different parameters that impact accuracy and there will always be a human reviewer, so I still don’t see a scenario where automation takes over completely. The exact opposite, we aspire to use technology to support our transcribers. Our precious freelancers are still with us, and I assume things won’t change in the years to come.”

After such a massive funding, the question that always comes up is where the company is headed, now that an acquisition is probably off the list. Livne tells Geektime that the company still wants to go public in 2022, and is currently in the middle of choosing the right bank for the move. To my question on how the company would go public, he responds that after the bank is chosen, Verbit will look at both a SPAC and traditional IPO route. However, Livne says that “because the market is down on SPACs as of late, we’ll probably choose the traditional way.”

Verbit is planning on expanding into new vectors, and Livne adds that the company is currently developing new products that will be able to do “much more than transcription”. The company has 350 employees split between offices in Tel Aviv, New York, California, Colorado, and Kiev. This is in addition to the 30,000 freelance transcribers, coming from 120 different countries, to provide service and train the company’s AI.