Following growth in enterprise and e-commerce accounts, Edinburgh-based translation company Lingo24 is poised to break the GBP 10m revenue mark for the first time this year.
The company has shifted its business model from serving what is often called the “long-tail of demand” (i.e. one-off requests received online) to enterprise accounts and it looks like the strategy is paying off.
“I think culturally it has been challenging. I think I underestimated the shift in skills necessary to be a credible enterprise partner. But we are getting there. The numbers are looking good,” Christian Arno, Founder and CEO of Lingo24, told Slator in an interview.
The company recently opened a branch office in The Netherlands where some of its top accounts have a strong presence, including Scottish craft beer company Brewdog, rubber wellington boot and footwear brand Hunter Boots, and UK cosmetics retailer Lush.
While deal fever has gripped the language industry, Arno is not keen on growth through acquisitions. “I am generally skeptical of acquisitions from a cultural perspective and a value perspective,” he said. “Obviously, when we get to the stage where we double the revenue, that may change.”
However, Arno is open to taking on additional investors. “I think that will happen. Not in the short term, but I think that will happen at some point for sure,” he said. In 2014, Lingo24 took in a Scottish businessman as an outside investor.
Founded in 2001, the company has been investing heavily in technology, according to Arno. Part of this investment is building its own neural machine translation models using its own group of MT experts. Lingo 24 has also built its own Translation Management System (Flow), its own computer-assisted tool (Coach), and its own client portal (Ease).
They are booking the investments partially as operational expenditure and partially capitalize them in the balance sheet. Arno said the GBP 4m in technology-related investment is also the main reason why Lingo24 made a loss in its two most recent financial years (-GBP 1.88m in 2016 and -GBP 1.27m in 2015, according to regulatory filings). The CEO is hopeful to return to profitability in the current financial year.
While owning and developing a proprietary translation technology stack can be costly, it also often allows for greater flexibility in customizing solutions.
But what about clients who already use a particular TMS or CAT tool? Apparently, this isn’t a challenge Arno encounters often. “We are talking to companies for whom translation isn’t really strategic. So their in-market reviewers will often be using Excel or Word. So we will be the first people introducing a CAT tool into that process,” he explained.