While many were busy enjoying the festivities of late December, AWATERA executives had another reason to celebrate. The Russia-based language service provider (LSP) merged with Ireland-headquartered company SPEAKUS, a cloud-based remote simultaneous interpreting (RSI) provider, on December 25, 2019.
AWATERA CEO Alexey Shesterikov told Slator that the transaction involved a share-swap, and that the owners of SPEAKUS have now become minority shareholders in the combined company.
Run on a mid-size LSP model, AWATERA services medium- to large-scale national and international businesses. The company is one of the largest of its kind in Russia and generated revenues of USD 19.4m in 2018.
Founded in 2014, RSI provider SPEAKUS brought in revenues of less than USD 1m in 2019, Shesterikov said, although “its revenue and customer base tripled YoY.” Jointly, the company is targeting revenues of USD 22–25m in 2020. Both AWATERA and SPEAKUS achieved EBITDA in excess of 15% in 2019, he said.
According to Shesterikov, the combined organization now has more than 350 FTEs, based in offices across five Russian cities, as well as in Ukraine, Kazakhstan, the US, and in Ireland, where SPEAKUS CEO Alex Gusev is located.
Shesterikov also told Slator that SPEAKUS COO and Co-founder, Igor Gusev, will become the Chief Product Owner at AWATERA and will focus on developing the company’s existing tech stack including Perevedem.ru (Perevedem is Russian for “translate”) and its interpreter marketplace, Interpret.me.
Although “SPEAKUS will continue to develop as an independent brand,” according to Shesterikov, the company’s next steps will focus on integrating AWATERA’s Interpret.me marketplace into the SPEAKUS RSI platform.
RSI for MICE and LSPs
The SPEAKUS customer base is made up of small events agencies and LSPs, Shesterikov said. The company focuses on the MICE (Meetings, Incentives, Conferences and Exhibitions) market and supports remote interpreting scenarios including business events as well as corporate training and video conferencing.
Expansion into the RSI market lies at the heart of this deal, and Shesterikov explained that they “see RSI, especially in combination with CAI (computer-aided interpreting) tools, as one of the most promising interpreting trends and expect its market share to grow up to 30–40% in the next 3–5 years. The key driver here is, of course, the global 5G.”
The RSI market is still in its nascency, but has gained some traction with LSPs and outside investors. RSI players, such as Swiss-headquartered Interprefy and US-based Boostlingo, have both raised several millions in funding over the past few years.
Meanwhile, SPEAKUS raised EUR 50,000 in a July 2017 angel round. And from the LSP side, Sweden-headquartered Semantix, a regular on the Nordic public sector interpreting scene, acquired RSI startup Tolkvox in early 2019.
Moving forward, selling the RSI platform to LSPs will remain part of AWATERA’s strategy: “We see the biggest opportunity and scaling potential in the SaaS business model and partnering with LSPs,” Shesterikov said. “So instead of serving the end clients and growing organically, the ultimate goal is to become the world’s leading RSI tool for LSPs and focus on the platform’s development and partner success management,” he added.
AWATERA is no stranger to mergers and is itself a product of a 2017 merger between former rival LSPs Traktat and Abbyy LS. Similar transactions are set to continue into 2020 as, according to Shesterikov, they “plan to carry out a number of mergers every year [and] are currently negotiating a merger with two companies at once.”