Startup and technology funding has picked up in the language industry in 2018. Unbabel, Smartcat, Qordoba, Interprefy and Boostlingo and others secured funding this year with each targeting a different niche in this sprawling global industry.
Among the bigger venture capital investments this year was Lilt’s USD 9.5m series A round in October 2018, led by Sequoia Capital, arguably the top VC firm in Silicon Valley. California-based Lilt was founded in 2015 and pinpointed by Slator as “one to watch” back in February 2016.
At the time, the product and the messaging were centered around translator productivity. Lilt’s adaptive and predictive machine translation and interactive user interface provided a refreshing new take on conventional segment-based translation software and promised significant productivity gains.
Originally, Lilt marketed and licensed its solution to translators for a monthly fee, and translators could use Lilt’s software for their own LSP- and end-customers as they pleased.
But the market for translation productivity solutions is crowded and translators are loathe to have to adopt yet another tool. Moreover, large LSPs from TransPerfect to Lionbridge to LanguageWire and dozens more operate their own platforms, where translators log in and work in proprietary environments, which often include a productivity component. In order to accelerate traction, Lilt launched an LSP Partner Program and a University Program and partnered with fellow West Coast language tech companies.
Supplying the “Full Solution”
Around the same time in early 2017, however, Lilt also began exploring offering translation services directly to clients, a major strategic shift for a technology provider.
Asked by Slator about the change in direction, Kyle Paice, Head of Marketing at Lilt, denied that the move should be seen as a pivot from the original business model, pointing out the company’s mission had always been to “make the world’s information more accessible to everybody, regardless of where they were born or what language they speak” and that “transforming translator productivity [should be considered] as a means to this end”.
Lilt is a technology company that offers managed services as part of our product — Kyle Paice, Head of Marketing, Lilt
Instead, he told Slator in an email interview that the move “happened organically, and as an experiment.” Paice said that “initially, we thought we could focus on the loop and partner with vendors for the humans. But in many cases our customers couldn’t find vendors who embraced this new way of working, so we began supplying the full solution.”
Discontinuing the LILT PRO License
The move away from a business model based on subscriptions from individual translators was completed on October 19, 2018, when shortly after announcing the Sequoia investment, Lilt CEO Spence Green informed individual subscribers to Lilt Pro in an email that the company would be “discontinuing the LILT PRO software license.”
“We will be discontinuing the LILT PRO software license” — Spence Green, CEO, Lilt (Oct 19, 2018)
Translators could keep using Lilt but would no longer be charged. And, they could apply to become a translator for Lilt’s services business but would have to go through a qualification process.
Lilt says translators who become part of their vendor pool are free to use the tool for work from Lilt or third-party clients, and, as Jost Zetsche writes in the October 2018 Tool Box Journal, translators are even allowed to allowed to contract directly with a Lilt client if the client is interested in that.
Marketing Head Paice confirms that “if a translator wants to work with an enterprise directly, we encourage that.” The translator will have to find a way to get paid outside of Lilt as the platform “doesn’t have any sort of payment processing that customers can use to pay translators directly,” according to Paice.
The move to a services-based business in effect makes Lilt a language service provider with a unique technology asset at its core, similar to companies such as Unbabel, Gengo, LanguageWire, Straker, Lingo24 and many others.
Lilt rejects the LSP label, however. Paice insists that Lilt is “a technology company that offers managed services as part of our product”. Furthermore, he is optimistic about the scalability of the technology, which Paice said can be applied to “any content type.” He elaborated: “to apply our human-in-the-loop technology to a given domain, two requirements must be met. First, you need a system that adapts continuously and in real-time, which we provide. Second, you need a human who’s a domain expert.”
It remains to be see how much of an emphasis Lilt places on developing the services component of the business vs continuing to build and sell its core software. What is clear is that, with USD 9.5m in series A funding under its belt, Lilt is not short of options.
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