Less than six months after raising a $157 million Series D round, AI-powered transcription and captioning platform Verbit announced today it has closed $250 million in a Series E round that values the company at $2 billion. The latest funding brings its total raised to more than $550 million.
The new capital was led by Third Point Ventures, with participation from existing investors Sapphire Ventures, More Capital, Disruptive AI, Vertex Growth, 40North, Samsung Next and TCP.
The startup will use the proceeds to invest in product development and continue its vertical and geographical expansion, CEO and founder of Verbit Tom Livne said, adding that it will also double down on its acquisition strategy.
Verbit is a step closer to its planned IPO in the near future after closing the Series E, Livne said when asked regarding its listing plan.
Verbit was founded in 2017 by Livne, who previously had a career in law. Livne often found himself dissatisfied with the slow turnaround time of transcriptions but did not have the tools as a lawyer to tackle the issue head-on. He founded the AI-powered transcription and captioning platform startup: AI-driven automated transcription services coupled with professional transcribers.
The transcription industry, which is estimated at around $30 billion, is very fragmented, with many small mom-and-pop companies. The market is ready for consolidation, Livne told TechCrunch via email. In May, Verbit completed its first acquisition, VITAC, for $50 million, Livne added.
“Verbit, as the leading platform, aims to be this consolidator with more than 1,000 targets in our pipeline,” Livne said.
Verbit’s automated speech recognition (ASR) technology platform offers customers word-for-word, interactive and collaborative transcripts and captions.
What makes Verbit’s platform unique is that it harnesses the power of both artificial and human intelligence to provide vertical-specific transcription and captioning, building solutions that fit each industry, Livne continued.
“Since our AI is trained based on the vertical and customer at hand, our platform can build custom models that improve over time. It means Verbit’s customers are in the legal, education, media and enterprises sectors. Each has access to transcripts and captions that comply with their unique, industry-specific regulations and standards, such as HIPAA (Health Insurance Portability and Accountability Act) and SOC II compliance,” Livne said.
Another major differentiator is that its model uses machine learning and natural language processing (NPL) to achieve over 99% accuracy with a turnaround time that is 10 times faster than the industry standard, according to Livne.
Verbit serves more than 2,000 customers across the media, education, corporate, legal and government sector. Its clients include CNN, Fox, Disney, Coursera, Stanford, Harvard University, Amazon, Microsoft and AT&T, Livne noted.
The company is growing rapidly, with 6x year-over-year revenue growth and over $100 million in annual recurring revenue, Livne continued. The company is also cash efficient and has a high customer retention rate of 163%, which are important metrics of trust by its customers, he added.
Verbit, which has a strong presence in the U.K. and Australia, plans to expand further into Europe, including Germany, France, Spain and others, Livne said. Those countries are compelling because Verbit sees a substantial amount of inbound interest, he added.
“The market opportunity is tremendous and, given our position as an industry leader, we can penetrate these markets quickly,” Livne said.
Verbit has more than 470 employees based in New York, Colorado, Pittsburgh, Palo Alto, Canada, Tel Aviv and Kyiv, 35,000 freelancer transcribers and 600 professional captioners globally.
“This funding round is a vote of confidence in our ability to solidify our position as the market leader within the transcription space,” said Livne. “We built a powerful technological platform to modernize this industry and our strategy to build vertically integrated, voice AI solutions has brought tremendous value to our customers and enabled their businesses to become more accessible.”
“Verbit is a special company combining exceptional technology-driven organic and inorganic growth in the transcription marketplace,” said managing partner at Third Point Ventures Rober Schwartz, who will join Verbit’s board of directors. “It’s rare to encounter such a large, fragmented market ripe for digital transformation and simultaneous consolidation.”