Investment Firm K1 Buys Poland’s XTRF in Second TMS Acquisition

XTRF Sells Majority State to Investment Fund K1

On September 22, 2021, US investment firm K1 announced the acquisition of a majority stake in  translation management software provider (TMS) XTRF. The financial terms of the investment remain undisclosed.

The Poland-based TMS provider was founded in 2010 and operates out of Krakow. It offers a client portal, a vendor portal, and workflow, invoicing, and sales management. XTRF also provides integration with a range of other TMS and translation productivity (CAT) tools including RWS Trados, Across, Memsource, memoQ, and XTM.

The latter, UK-based XTM, has also become a sister company of sorts to XTRF, with K1 having acquired a majority stake in XTM back in January. K1 typically invests in high-growth enterprise software and SaaS companies to help them scale and has partnered with more than 140 to date.

XTRF’s client base is made up of language service providers (LSPs) — predominantly small and mid-size providers — while XTM focuses firmly on the enterprise customer, with clients including Expedia, Sony, and Volvo.

As XTRF CEO Andrzej Nedoma explained in a press release, “we founded XTRF to help the translation and localization industry work more efficiently by delivering user-friendly and customizable management tools.” Among its largest LSP customers is Sweden-based Semantix, which was acquired by TransPerfect in July 2021.

As for XTRF’s financials, filings with the Polish regulatory body show the company generated revenues of PLN 13.1m (USD 3.3m) in 2020, growing 17.8% from revenues of PLN 11.1m (USD 2.8m) in 2019. In addition, XTRF reported net profit of around USD 0.25m in 2019.

The K1 transaction is not the first time the TMS provider has taken on external investors. In December 2020, XTRF bought out their former VC investor, Experior Venture Fund, which had invested in the business six years earlier.

According to the same regulatory filings, the buy-back saw XTRF’s founders — CEO Nedoma, his father, Jerzy Nedoma, and Chief Innovation Officer, Dominik Radziszowski — recover Experior’s ca. 44% stake. The three founders reclaimed full company ownership (albeit temporarily) through the buy-back, which was partially financed by a bank loan.

In 2021, the company instituted an advisory board known as the “Wise People Board.” They named Kristina Cole, Localization Program Manager at Medtronic, as a member of the board, along with former CEO of TrustPoint Translations Claes H Holm, and Roberto Ganzerli, the Founder and former CEO of Arancho Doc, which was sold to Technicis (now Acolad Group) in 2017.