Remember Spinvox? The British voice-to-text start-up has been out of the news since the summer, when we revealed some serious questions about its technology and its finances.
Now the Sunday Times has reported that the company is close to a £92m sale to the American voice technology giant Nuance.
A source at Spinvox told me a few weeks back that talks were under way with Nuance – but there had been rumours of a sale to just about every big technology name you could mention. This time, though, it looks as though a deal really is in the offing.
For one thing, the Spinvox PR machine is not rubbishing the story; for another, today’s deadline for the company to repay a £30m loan has been put back to the end of January, apparently to let the negotiations proceed.
The real questions are what exactly Nuance is considering buying – and why. Back in the summer, on the very day my first article about Spinvox appeared, Nuance got in touch with me.
They wanted to boast about their own world-leading technology, while implicitly criticising Spinvox, both for its claims about its ground-breaking speech recognition work and for its attitude to privacy.
Nuance told me in July that Spinvox was “absolutely not ahead of the game”, and the company’s spokesman was also keen to stress that “in the current climate about data privacy, being transparent is absolutely critical.”
So why, just a few months later, would Nuance be interested in buying the Spinvox?
Well, there are relationships with some of the world’s biggest mobile operators – notably a giant contract to supply a service to up to 100 million subscribers in South America.
Those kind of deals take years to hatch, so Nuance may see Spinvox as a short cut to a lucrative relationship with the likes of Vodafone and Telefonica.
Then there’s Spinvox’s Voice Message Conversion System, D2 – or “The Brain”, as the company dubs it.
Speech experts at the firm still insist they have developed something innovative, even if it’s more a case of humans aided by technology than technology aided by humans.
But the real value may lie in all the data that Spinvox has accumulated over the years, in the form of millions of voice recordings and the text derived from them.
How much of it is still stored on the company’s servers is unclear – although I’ve just noticed this line in the Spinvox terms and conditions:
“We may establish general practices (and change such practices without notice) and limits concerning use of the Services, including, without limitation, the maximum number of days that messages or other uploaded Content will be retained by us.”
It also makes clear that this data may be sent around the world:
“We may transfer your information outside the European Economic Area. Again, we will endeavour to comply with the Data Protection Act in respect of such transfers.”
What I can’t find is any reference to what happens to your old messages if Spinvox is sold to another business.
So if this deal does go through, customers will want to know what it means for the privacy and security of their data.
Shareholders will also be asking what a sale to Nuance would mean for them. Some early investors – such as Carphone Warehouse and Invesco – have already effectively written off most – if not all – of their money.
And what of those Spinvox staff who heeded appeals this summer from their boss Christina Domecq to take part of their wages in the form of stock options to help the business through to profitability?
A number of those employees have now left, but they may now be pulling those share options out of a drawer and wondering whether they are worth anything.
