The language industry, at SlatorCon San Francisco 2019: Unbabel stuns with $60 million dollar cash infusion. Looks like neural machine translation (“human-in-the-loop”) works [Part 2 of our 3 reports, with video]

Alexandra Dumont
Head of Operations
The Posse List

3 October 2019 (Paris, France) – SlatorCon events are our favorite events for covering the language industry. We attend both the U.S. and Europe events. On 12 September 2019 over 120 language industry leaders gathered at the W Hotel in the heart of the city to take part in a sold-out SlatorCon San Francisco.

Participants came to mingle and network with industry decision-makers, which included CEOs, owners, and senior executives of leading language service and technology providers, private equity and venture capital investors, technologists, and service and tech buyers.

The optimism was palpable among participants, as speakers painted a picture of a healthy and growing industry, which has become the target of renewed investor interest over the past couple of years. The program ran the gamut — from language data annotation at scale, enterprise localization, NMT, M&A, corporate development, healthcare interpreting to venture capital and private equity funding — shining a spotlight on just how many different stakeholders contribute to this vibrant industry. Presentations followed SlatorCon’s trademark style of back-to-back 25-minute talks.

My big take-away from the event this year: there is a new kind of AI language translation agency that is transforming the language industry and law firms and in-house corporate legal departments are gravitating to it (they attended in record numbers this year), moving away from the “usual suspects”. They are going to look just like the existing agencies, but they’re going to have a different engine; a fundamentally different engine that is far more efficient.

This makes sense. They are going to go and sell exactly the way a “standard” agency would sell, but under the hood they’re going to be much more efficient, which also means they’ll have higher gross margins. So they’ll either have one of two passes: they can either run the business at a higher net income margin or they can underprice the market.

That’s the key, not this ad nauseam “innovation” and “disruption” babble at legal tech conferences. I spoke with the technology heads (or the representatives) of three Big Law firms at the event, plus two in-house counsel who are responsible for buying tech. All of them have enormous language translation needs in e-discovery plus other operations, and all have been (slowly) moving away from their regular agency providers. All of them agreed on two things:

1. The promise of innovation always enters the conversation with vendors, but it is not the most important element. As one “it takes a village, not a lightning rod, to deliver on the promise of innovation and very few vendors have that”.

2. They do not want a product that “changes how I behave”. What they do want is (a) process improvement and (b) service and support. Said one: “now THAT’S real innovation considering the state of many vendors in this market”.

That is what this advanced language tech is doing. There is an opportunity for efficacy. You make both your staff and your client better and deliver a higher quality of service in some way, shape, or form — whether it’s faster or better. Technology is enabling a whole new class of language translation and actually expanding the size of the market.

There is a lot to cover at these events so I have decided to restrict this 3-part series to the following presentations:

1. Phil Shawe on the principles he credits for TransPerfect’s success

2. Unbabel’s stunning $60 million dollar cash infusion by a group of venture capital firms which will turbocharge Unbabel’s strategy of cleverly combining the latest advances in neural machine translation with what is now often referred to as a human-in-the-loop production model (think linguists interacting with NMT carefully calibrated for a specific language combo and domain)

3.  Appen CEO on the expensive, complex, and crucial process of collecting language data for AI.

We covered TransPerfect in Part 1 (click here).

Here in Part 2, Unbabel.

Unbabel stunned the language industry with its announcement last week of a $60 million dollar cash infusion by a group of venture capital firms led by Point72 Ventures, an early-stage VC firm owned by hedge fund legend and billionaire Steven Cohen. The investment was actually “percolating” at the event but did not go “public” until last week.

The Series C round is set to turbocharge Unbabel’s strategy of cleverly combining the latest advances in neural machine translation with what is now often referred to as a human-in-the-loop production model (think linguists interacting with NMT carefully calibrated for a specific language combo and domain). In this strategy, the startup remains hyperfocused on customer-service content.

Leading the investment at Point72 Ventures was Sri Chandrasekar, a partner at the firm, who spoke on the SlatorCon San Francisco investor panel on September 12, 2019. Asked what attracts them to the language industry, he said: “I think it’s a combination of the right kind of industry dynamics. It is a big industry, there is a lot of labor, and a lot of amazing big customers who have a high willingness to pay.”

Watch the SlaterCon interview below. He explains how the language industry first appeared on his firm’s radar and lays out a bullish case for the industry as technology-driven automation accelerates: