End of the road looms for SpinVox

Things seem to be going from bad to worse for SpinVox.

The voice-to-text transcription company has been at the centre of a major kerfuffle in recent months regarding the genuineness of its claims about its technology and how it performs its service.

The latest development is a less-than-stellar assessment of its ROI performance by Invesco Perpetual, one of the early-stage investors, in its latest annual financial report published on September 11. Invesco also notes that that the company is up for sale.

In its report on the latest development, the Financial Times’ has a succinct summary of the financial picture at SpinVox:

[…] Reports last month suggested that Nuance, the US-based speech recognition company could be interested in the company. SpinVox declined to comment on plans for a sale.

Invesco has written down its stake in SpinVox from £750,000 to £76,000. Other investors include hedge fund GLG, RBS-owned ABN Amro and Goldman Sachs. Charles Dunstone’s Carphone Warehouse, an early investor, had 100,000 shares after disposing of about 260,000 in late 2007.

Privately-held SpinVox has raised more than £100m in a series of funding rounds, including emergency funding of £15m from shareholders at the end of July.

Investors have tightened their control over the company as they have advanced more funding. Changes made to SpinVox’s articles of association now mean that investors have control over hiring, firing and setting of pay at the company.

[…] Reports of financial mismanagement at the company have also been circulated to the company’s shareholders. SpinVox said that it had been the victim of a smear campaign by disgruntled former employees, and has asked Deloitte, its accountants, and Jones Day, its legal advisors, to investigate.

SpinVox’s most recent available accounts, for 2007, show a pre-tax loss of £30.2m on revenues of £2m.

My interest in the goings-on with SpinVox has largely been to do with how the company has been addressing the non-stop criticism from a PR point of view. Just razzle dazzle, in my view.

See also Mike Butcher’s report in TechCrunch Europe (“…if Spinvox does indeed go nowhere at least it won’t affect the startup market – well, too much.”) and Charles Arthur’s in The Guardian (“…The question now is whether anyone is going to want to buy Spinvox – or, indeed, its technology. Stay tuned.”)

(Originally posted at NevilleHobson.com)