Crowdsourced Translation Startup Gengo Raises $5.4M And Changes Its CEO

There are changes afoot at Gengo, the crowdsourced translation service based in Tokyo, Japan, which just announced its $5.4 million Series C round and a change of leadership. Matthew Romaine, previously CTO, is replacing fellow co-founder Robert Laing as CEO of the startup.

Gengo’s service connects translators with customers who want their words translated. It’s a particularly interesting company because, unlike many startups in Japan, its business is global, to the point that most of its revenue comes from overseas. Despite that, however, Gengo’s Series C round was put together entirely by Japanese VCs. It has landed big name investors in the past — including Intel and Atomico — but this time around the funding was lead by Recruit, with participation from SBI Investments, MUFJ Capital and CrowdWorks.

They are an intriguing set of backers, and not just because they are Japanese. Recruit offers an ever-increasing range of online services worldwide — it bought German restaurant booking service Quandoo earlier this year — while CrowdWorks is a global crowdsourcing firm that recently went public in Japan.

Tokyo-based Romaine told TechCrunch in an interview that it had been “more practical” to raise funding from Japanese investors rather than venture capitalists over in the U.S.. The new backers see “significant opportunities and growth potential in Japan,” especially with the Tokyo 2020 Olympics on the horizon. Their involvement in Gengo appears to be the primary reason for this change at the top.

“Because of my bicultural background and experience working across Japan and the United States, I’m proud to accept the baton as Gengo’s next CEO,” Romaine, who is American-Japanese and led the new funding round, wrote in a blog post.

Laing is transitioning to a ‘Special Projects’ role, which Romaine said is more than just lip service.

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Romaine said he plans to use the new money to make hires in Gengo’s U.S. and Japanese offices. He wants to increase the company’s sales and marketing efforts, and develop “more powerful translation tools” to help it crack international markets and expand its business in Japan.

Gengo’s new investors have similar global and service-oriented business. They could, at face value at least, be the kind of organizations to buy the startup outright in the longer term. Romaine, however, told TechCrunch that he hadn’t had conversations about a potential exit.

We had heard rumors that a number of Gengo staffers are departing the company following these changes. Romaine confirmed these exits, but said that they were “unrelated to the transition.”

“We did receive notice of departures before this announcement… some things happen coincidentally,” he added.

Gengo has processed over 300 million pieces of translated content to date. Last year it opened up its data with a portal that shows the speed, capacity, reliability and user feedback from its platform.

Today’s news takes Gengo to over $23 million in funding from investors. It raised $5.25 million from Atomico, 500 Startups and others in 2011, and went on to close a $12 million Series B round led by Intel Capital in 2013.