Localization SaaS Startup Lokalise Raises USD 6m in Series A

The translation, interpreting, and localization technology space is hot. In the space of less than 3 months, private equity giant Carlyle bought a majority stake in Memsource RSI platform Kudo raised USD 6m, and MT curator Intento USD 3m. Now comes Latvia-based Lokalise. The SaaS startup has raised USD 6m in a Series A round led by one of the three co-founders of VC firm Mosaic Ventures, Mike Chalfen, who now invests on his own.

Lokalise is a tech-only SaaS translation and localization management company. Prior to this Series A the company was bootstrapped. 

Petr Antropov, Lokalise Co-founder and Chief Revenue Officer, told Slator that other investors included Vienna-based capital300 and a number of high-profile angel investors, such as

• Andrey Khusid, Founder and CEO, Miro
• Nicolas Dessaigne, Co-founder, Algolia
• Des Traynor, Co-founder and Chief Strategy Officer, Intercom
• Matt Robinson, CEO, Nested
• Rich Waldron, Ali Russell, and Dom Lewis, Founders, tray.io
• Carlos Gonzalez-Cadenas, COO, GoCardless
• Eugene Katz, former CS lead, Atlassian
• Stephane Kurgan, former COO, King.com
• Charlie Songhurst

This is a very experienced group of people that is now incentivized to help Lokalise accelerate growth from what Antropov said is currently USD 4m in annual recurring revenue (ARR) — an impressive number given that Lokalise was started by Antropov and Co-founder and CEO Nick Ustinov as recently as 2017.

Antropov declined to discuss valuation. He said the company has, at present, 1,500 customers, grew 80% year-to-date, and employs 60 full-time equivalents.

Lokalise is not Antropov and Ustinov’s first venture. In the late 1990s, CEO Ustinov developed the first email service in Latvia, called Inbox.lv, which remains popular to this day. According to Forbes, another Ustinov project was the Roamer app, which helped avoid mobile phone roaming fees when traveling: “The backend created to ease localization to different languages proved to be a product with market demand, and later became Lokalise.”

Prior to Lokalise CRO Antropov co-founded social network service OK.ru (sold to the Mail.ru Group) and streaming provider Megogo.net. Given that entrepreneurial trajectory it is quite interesting the duo would choose localization as their next project.

“LSPs come along with our corporate customers who pay the bills” — Petr Antropov, Lokalise

Lokalise appears to have found rapid traction with developers at fast-growing tech businesses and listed Notion, Revolut, and Lemonade as clients in the press release accompanying the funding announcement.

Antropov told Slator that localization of mobile apps, games, websites, IoT, and standalone software currently contribute in equal measure to revenues. The startup does not want to limit itself to a particular corner of the market, however, and Antropov said they are targeting tech-savvy companies using all possible platforms and technologies.

Scaling across different verticals and customer segments has, historically, been hard for translation management systems, as the need for custom features escalates as more and larger customers are onboarded.

Antropov is confident they can overcome the challenge. He said, “We believe that we’ll be able to develop approximately 200 major features, which can serve most of the customers. The demand for thousands of custom features should eventually fade out allowing the industry to leap forward.”

Lokalise is a tech-only company and has no plans to provide services, Antropov said. Unlike fellow VC-funded startup Smartcat and others, they have no plans to launch a translation marketplace. According to Antropov, “Most of our customers have their own arrangements with internal or external translators. But for those who either don’t or would like to explore other options, we make introductions to the LSPs that are experienced with Lokalise.”

“Most of our customers have their own arrangements with internal or external translators”

The Lokalise client base is firmly with the enterprise. Asked if language service providers (LSPs) make up a meaningful proportion of their client base, Antropov replied, “It’s difficult to say since LSPs come along with our corporate customers who pay the bills.”

The battle for ownership of the enterprise is on as tech-only providers step up their efforts to lock in corporate localization buyers and relegate LSPs to a resource on someone else’s platform. Lokalise’s USD 6m Series A will only add to what has been an accelerating trend over the last few years.

On how the pandemic has impacted the business, Antropov said the company had been experimenting with work from home (WFH) even prior and the “decision to turn fully remote did not cause difficulties but actually increased the productivity.” He added that WFH now allows them to access the global talent pool — which, combined with millions in funding, will see Lokalise go on a hiring spree over the coming months.

“Many companies started to localize their products and services more intensively, since localization can open new markets while existing markets can stagnate”

As regards customers, Antropov said that “Covid required us to focus our activities on geo and industries that suffered less. At the same time, many companies started to localize their products and services more intensively, since localization can open new markets while existing markets can stagnate.”

Image: Lokalise Founders Petr Antropov (L), Chief Revenue Officer, and Nick Ustinov, CEO