Rory Cellan-Jones

Spinvox: The end of the saga

  • Rory Cellan-Jones
  • 30 Dec 09, 18:22 GMT

The call with news of a deal in the technology sector came mid-afternoon on 30 December, a day when much more important news was breaking, so I realise that the sale of Spinvox to Nuance may not attract a lot of attention. But it brings to an end the remarkable and rather sad story of what seemed to be one of Britain's most promising young technology businesses.

At the beginning of 2009, Spinvox was apparently riding high, winning awards for its ground-breaking voice recognition technology, recruiting some of the brightest and best in the telecoms and marketing industries, and signing big contracts with the world's leading telecoms operators. But behind the scenes, it was wrestling with huge issues surrounding both its technology and its finances - issues that we revealed on this site in July (see here, here and here).

Now a company that had raised well over $200m from blue-riband backers like Goldman Sachs and Carphone Warehouse has been sold for $102.5m (around £64m) and about a third of that in Nuance shares rather than cash. The Nuance press release unveiling the deal makes no mention of the company's founders Christina Domecq and Daniel Doulton, and in fact features no quote from anyone at Spinvox - highly unusual in this kind of announcement. So the deal raises a number of questions, which I've put to both Nuance and to Spinvox

(1) Will the backers get their money back?

Neither company was at all forthcoming on this issue; but bearing in mind that a £30m loan - due before Christmas - needs to be repaid, it appears there's little left for the investors. Those who were in at the start - like Carphone Warehouse - may have written off their stakes already. As for Christina Domecq, who at one stage had the biggest stake: hers were ordinary shares, so will rank behind those of investors who came in with refinancing late in the day.

(2) What happens to Christina Domecq and Daniel Doulton?

The chief executive Christina Domecq - and to a lesser extent her co-founder Daniel Doulton - were highly-visible standard-bearers for the company until this summer, since when they have disappeared entirely from view. So will either or both stay on? "We're talking to them... a lot of knowledge, a lot of history, a lot of capability in those folks," was what Rich Green of Nuance told me about the founders, but he would go no further.

(3) Will the staff, and in particular the Cambridge Speech Lab, be retained by Nuance?

Again, Mr Green was complimentary about the skills of the Spinvox staff and in particular about its Advanced Speech Group at Cambridge headed by Dr Tony Robinson. "Spinvox has a lot of great people, Cambridge is part of the value of what we're acquiring." But he could not give any details of who would be retained by Nuance, explaining that there would be an "integration process" over the coming weeks. One former employee tells me that a number of current staff are planning to hand in their notice on Monday, in the expectation that they have no future with the company.

(4) Why is Nuance doing this deal?

Nuance told me back in the summer that Spinvox had no technology that it didn't have already. And this afternoon, Rich Green repeated that: "Nuance voice-to-text technology is second to none." So why on Earth is it buying Spinvox? Surely it's the chance to take over those contracts with global telecoms firms? "The contracts and global coverage are part of it," he granted, and went on to explain that Spinvox brought a lot of operational expertise to the party. That expertise, of course, extends to the operation of call-centres around the world, and it's not entirely clear how many of them will be retained by Nuance. But at just over $100m, the deal may seem to the American company a reasonably cheap way of reinforcing its position as a leading speech-recognition firm while being introduced to some big potential customers.

So the curtain may have fallen on the Spinvox saga - but there are still plenty of questions left unanswered.

Update 1350, 31 December: The data question

Last night, I was contacted by someone who pointed out that I'd omitted one key question: what happens to Spinvox's data?

I'm told by a reliable source that over 100 million voicemail messages dating back to 2006 - both the audio and the transcribed text - are still stored by Spinvox, amounting to 100 terabytes. It's a very valuable resource - so much so that I'm told that a major search engine company was also looking at buying the business in recent months, making it clear that it was interested only in the data - not in the technology.

Now a spokesman for Spinvox has confirmed to me that all of that data will simply be handed over to Nuance as part of the deal.

There are obvious privacy issues here: did Spinvox users realise when they signed up that their private messages might be stored for years, then handed over to an American company?


  • Comment number 1.

    Spinvox only got so big so fast as they did by using smoke and mirrors. If they had been up front from the beginning about how much of the transcription process was done by humans rather than software, they may still be around today, although quite a bit smaller in size.

    I suppose it's a lesson to all businesses to not exaggerate the scalability of your company.

  • Comment number 2.

    Or possibly just a lesson not to sink two hundred million dollars into something without first making sure it's not snake oil.

  • Comment number 3.

    This comment has been referred for further consideration. Explain.

  • Comment number 4.

    The smear campaign initiated in the summer to discredit Spinvox finally paid off and Spinvox was sold for a pittance to a predatory technology company. Funny how all those issues about human intervention are no longer an issue...

  • Comment number 5.

    smear campaign

    That's quite an accusation. Can you back it up at all?

  • Comment number 6.

    It's sad to see a 100% UK technology firm leave the country, sold for next to nothing to the world's largest speech technology firm following a merciless smear campaign that frightened investors to retreat before the project could ripen.

    Nuance couldn't beat Spinvox' technology and did the next best thing: bought them.

    If the BBC journalist's real issue was with data privacy, then perhaps the government deserves his sharp attention.

  • Comment number 7.

    Its strange why suddenly everyone who were so busy pulling down Spinvox's credibility by questioning their data security has suddenly become so quiet about what Nuance is doing. Nuance is sending their voicemails to get manually transcribed in India. Check out this website this is the place where Nuance gets its voicemails manually transcribed. Now why there is no fuss about Nuance doing the same thing what Spinvox was criticised for. Have we sold ourselves to American companies??

  • Comment number 8.

    following a merciless smear campaign

    I'll take it from that that you can't back it up, but you don't mind just saying it again. Spinvox claimed to have highly automated transcription technology, and they didn't. That would make them liars.

    Nuance doing the same thing what Spinvox was criticised for

    The Spinvox criticism wasn't because they were usign call centres. It was because the were using call centres while claiming to be doing something else. They lied about what they were doing, Nuance didn't.

  • Comment number 9.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 10.

    SpinVox has a job to understand everyone.

    But it’s the one job it’s very good at. How does it do it? It captures spoken words and feeds them into a Voice Message Conversion System, known as ‘D2’ (the Brain), and spits them out as text content.

    So D2’s pretty smart. It’s bound to be, as D2’s a combination of artificial intelligence, voice recognition and natural linguistics. But it also knows what it doesn’t know and is able to call on human experts for assistance. It learns all the time about how we speak, and what we say, from the mundane to the ridiculous and so is able to convert what you mean to say.

    Over the past four years D2 has been chomping through our words, learning thousands of new words every week and converting millions of messages from millions of different voices and accents, in English, French, Spanish and German. But now it’s onto the main course and wants to feast on your words to become bigger and stronger.

    Advanced Technology

  • Comment number 11.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 12.

    There are plenty of start-ups that are very good a raising capitol, and not so good at running a business, this was a big part of the dot-com bust.

    The business model was raise start up investments, it is up to the investors to see if the organization is up to the task of doing business and earning their keep.

    - Jan

  • Comment number 13.

    It is shocking to see how companies pull off such huge swindles involving millions of dollars, but the biggest "fraud" here is that countless private voicemails are now going to be in the hands of third parties - many of which may even contain sensitive corporate secrets and other private matters. However, the people who signed up for this service should have considered the very nature of the business in that their recordings are being filtered by another company and that in itself should be enough to indicate that it isn't private - similar to how we conduct ourselves online, if we upload any pictures on the internet, you should assume it is no longer private.


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