logo image
  • News
    • People Moves
    • Deal Wins
    • Demand Drivers
    • M&A and Funding
    • Financial Results
    • Technology
    • Academia
    • Industry News
    • Features
    • Machine Translation
    • — Divider —
    • Slator Pro
    • — Divider —
    • Press Releases
    • Sponsored Content
  • Data & Research
    • Research Reports & Pro Guides
    • Language Industry Investor Map
    • Real-Time Charts of Listed LSPs
    • Language Service Provider Index
  • Podcasts & Videos
  • Events
    • Design Thinking – February 2021
    • — Divider —
    • SlatorCon Coverage
    • Other Events
  • Directory
  • RFP Center
  • Jobs
MENU
  • News
    • People Moves
    • Deal Wins
    • Demand Drivers
    • M&A and Funding
    • Financial Results
    • Technology
    • Academia
    • Industry News
    • Features
    • Machine Translation
    • — Divider —
    • Slator Pro
    • — Divider —
    • Press Releases
    • Sponsored Content
  • Data & Research
    • Research Reports & Pro Guides
    • Language Industry Investor Map
    • Real-Time Charts of Listed LSPs
    • Language Service Provider Index
  • Podcasts & Videos
  • Events
    • Design Thinking – February 2021
    • — Divider —
    • SlatorCon Coverage
    • Other Events
  • Directory
  • RFP Center
  • Jobs

Advertise on Slator! Download the 2021 Online Media Kit Now

  • Slator Market Intelligence
  • Slator Advertising Services
  • Slator Advisory
  • Login
Search
Generic filters
Exact matches only
Advertisement
SmartCAT Raises USD 2.8m Seed Round From Russian VC

4 years ago

August 9, 2016

SmartCAT Raises USD 2.8m Seed Round From Russian VC

M&A and Funding ·

by Florian Faes

On August 9, 2016

4 years ago
M&A and Funding ·

by Florian Faes

On August 9, 2016

SmartCAT Raises USD 2.8m Seed Round From Russian VC

Translation Management System (TMS) provider SmartCAT is going it alone. The firm spun off from its parent ABBYY Language Solutions and is now an independent company.

“The idea was, from the very beginning, that it should be a product for the open market, not just an internal project of ABBYY Language Solutions,” SmartCAT CEO Ivan Smolnikov told Slator in a call.

He should know. Smolnikov was the founder and long-time CEO of ABBYY Language Solutions (ABBYY LS) but has now moved to head SmartCAT as CEO. He remains a shareholder and Chairman of the Board at ABBYY LS.

Advertisement

Spread Your Wings

Smolnikov says they decided to build SmartCAT at the end of 2012, but to keep it under ABBYY’s protective wing until it had all the essential functionalities available in competitor tools. That moment came in 2015—and they decided to spin off SmartCAT into a separate company, which could then tap independent venture capital firms for funding.

Ivan Smolnikov
Ivan Smolnikov

The seed round values SmartCAT at an estimated USD 12–14m. Smolnikov would not comment beyond confirming that RedSeed’s investment valued SmartCAT at “over USD 10m.” He disclosed, however, that he and co-Founder and CTO Vladimir Gusakov own a majority of the company, with ABBYY Group owning less than 20%.

It is likely that RedSeed took a 20% or slightly smaller stake. Smolnikov emphasized that ABBYY LS owns no stake in SmartCAT and no longer shares any office space, staff, or other resources.

RedSeed (not to be confused with its Italian-based VC namesake redseed.it) is led by Ilya Shirokov (speaking here at a conference), who previously ran a social networking unit of Russia’s largest Internet company Mail.Ru. According to Smolnikov, there are several other shareholders in the VC firm, all of whom have connections to Mail.Ru.

Headquartered in Milpitas, California, where marketing and product teams as well as management are located, SmartCAT’s R&D department is based in Russia. According to Smolnikov, total headcount is 60, with R&D making up the bulk of staff with 45 engineers, tech support, and testers.

Big Scope

SmartCAT’s vision is ambitious. It wants to be a translation productivity tool for translators, a translation management platform for corporate buyers and language service providers (LSPs), as well as a translation marketplace.

SmartCAT charges a 10% commission on the use of freelancers on its marketplace

Asked about competitors, Smolnikov mentions Matecat, Memsource, XTM, and SDL, but points out significant differences in the competing solutions. In the technical documentation space, we would add Across to the list, which launched its own marketplace this year called crossMarket.

Small- to mid-sized LSPs form the backbone of the current client base. According to Smolnikov, 600 LSPs are currently counted as monthly active users. The total number of clients is 1,500.

Asked about which LSPs use SmartCAT, Smolnikov said they would disclose some names in the coming months. On the buy-side, the company lists Epicor, Weebly, Coursera, Netcracker, and YIT as clients.

With cloud-based solutions, questions about confidentiality and data security inevitably arise. Smolnikov stressed that SmartCAT does not reuse linguistic data and that they are open to signing tailored NDAs with clients.

SmartCAT runs on MS Azure infrastructure hosted in the US and Ireland. Smolnikov said they are also evaluating a solution in China, as client interest picks up there. The platform is also available as an on-premise solution for those who prefer to run it inside their own firewall.

Where’s the Money?

SmartCAT has been looking at a number of ways to monetize the platform. The tool is free for freelancers (some fees for use of machine translation or OCR functionalities apply). Corporate clients can go with the free “standard” plan or upgrade to “advanced,” which mostly provides additional support functions.

Emerging as the key to monetizing, however, is the marketplace. LSPs and end buyers at corporate translation departments pay SmartCAT a 10% commission on payments to freelancers registered on the SmartCAT marketplace. Bring your own freelancers or internal linguists and SmartCAT will not charge you. But with an estimated 70,000 freelancers in the marketplace, relying on a bring-your-own-linguist strategy might be not be feasible long term.

If SmartCAT manages to curate a high-quality pool of linguists, this pay-as-you go model could be attractive to small to medium LSPs. However, they will need to review if the savings on linguist sourcing and on license costs for competitor products make up for SmartCAT’s estimated five-percentage-point hit to gross margins.

TAGS

Acrosscomputer-aided translationIvan SmolnikovMateCatMemsourceSDLSmartcattranslation management systemXTM
SHARE
Florian Faes

By Florian Faes

Co-Founder of Slator. Linguist, business developer, and mountain runner. Based in the beautiful lakeside city of Zurich, Switzerland.

Advertisement

SUBSCRIBE TO THE SLATOR WEEKLY

Language Industry Intelligence
In Your Inbox. Every Friday

SUBSCRIBE

SlatorSweepSlatorPro
ResearchRFP CENTER

PUBLISH

PRESS RELEASEDIRECTORY LISTING
JOB ADEVENT LISTING

Bespoke advisory including speaking, briefings and M&A

SLATOR ADVISORY
Advertisement

Featured Reports

See all
Slator 2020 Language Industry M&A and Funding Report

Slator 2020 Language Industry M&A and Funding Report

by Slator

Slator 2021 Data-for-AI Market Report

Slator 2021 Data-for-AI Market Report

by Slator

Slator 2020 Medtech Translation and Localization Report

Slator 2020 Medtech Translation and Localization Report

by Slator

Pro Guide: Sales and Marketing for Language Service Providers

Pro Guide: Sales and Marketing for Language Service Providers

by Slator

Press Releases

See all
Rheinschrift Language Services – Strategic Improvements and Workforce Expansion in 2021

Rheinschrift Language Services – Strategic Improvements and Workforce Expansion in 2021

by Rheinschrift Language Services

Memsource Acquires Phrase

Memsource Acquires Phrase

by Memsource

Across Systems will be part of the Volaris Group

Across Systems will be part of the Volaris Group

by Across Systems GmbH

Upcoming Events

See All
  1. Memsource MT Post-Editing Pricing Models Webinar

    Pricing Models for MT Post-Editing Workshop

    by Memsource

    · February 3

    Hear a panel of innovative localization professionals share different approaches for MT post-editing pricing.

    More info FREE

Featured Companies

See all
Text United

Text United

Memsource

Memsource

Wordbank

Wordbank

Protranslating

Protranslating

Seprotec

Seprotec

Versacom

Versacom

SDL

SDL

Smartling

Smartling

Lingotek

Lingotek

XTM International

XTM International

Smartcat

Smartcat

Translators without Borders

Translators without Borders

STAR Group

STAR Group

memoQ Translation Technologies

memoQ Translation Technologies

Advertisement

Popular articles

Why Netflix Shut Down Its Translation Portal Hermes

Why Netflix Shut Down Its Translation Portal Hermes

by Esther Bond

Top Language Industry Quotes of 2020

Top Language Industry Quotes of 2020

by Monica Jamieson

The Slator 2020 Language Service Provider Index

The Slator 2020 Language Service Provider Index

by Slator

SlatorPod: The Weekly Language Industry Podcast

connect with us

footer logo

Slator makes business sense of the language services and technology market.

Our Company

  • Support
  • About us
  • Terms & Conditions
  • Privacy Policy

Subscribe to the Slator Weekly

Language Industry Intelligence
In Your Inbox. Every Friday

© 2021 Slator. All rights reserved.

Sign up to the Slator Weekly

Join over 13,000 subscribers and get the latest language industry intelligence every Friday

Your information will never be shared with third parties. No Spam.