In the morning session of SlatorCon Silicon Valley 2024, language industry investors Aditya Govil (VSS Capital Partners) and Andrew Doane (K1 Investment Management) formed an investor panel moderated by Slator's Esther Bond.
Since VSS and K1 invest in companies in two very different areas of the language industry, GLOBO (medical interpreting) and XTM (localization technology), respectively, the panel had a fascinating discussion and highlighted some important The theme was touched upon.
Govil, who led VSS's investment in GLOBO in late 2021, shares some of the key growth drivers for the medical interpreting sector (which has since outpaced most, if not all, of the language industry). Outlined.
He cited the high growth in the number of limited English proficiency (LEP) patients in the United States and the health care sector's strong efforts to move toward value-based care. Here, he said, there is evidence that introducing language services helps patients understand their situation, “which leads to better outcomes and fewer readmissions.”
Regarding GLOBO in particular, Govil said he sees the company “transforming into a player in patient communication and engagement.” This means becoming the provider of choice for the entire healthcare system ecosystem, including acute care, clinics, outpatient surgery centers and home health care.
Why FUD is disappearing
Meanwhile, Doane said K1 was initially attracted to XTM because it was “a bootstrapped, founder-owned business with strong growth, high retention rates, and a diverse, high-quality customer base to build upon.” ” he explained.
After acquiring XTM in early 2021, K1 added XTRF to its portfolio in a second language technology acquisition, supporting Doan's proposal that “language technology is increasing its share of the total addressable market. ” further strengthened the theory.
XTRF was later integrated into XTM, but not immediately. As Doan explained, “The last thing you want on day one is to bash two companies in a thoughtless way that diminishes[their brand and the value of their customers].”
“There is a large body of evidence and a large body of research around implementing language services to help patients understand what is being communicated from the discharge perspective and care instructions, which leads to better outcomes and reduces readmissions. — Aditya Govil, Vice President, VSS Capital Partners.
The discussion turned to AI, with Govil first warning that there are “very high hurdles” to implementing advancements such as AI in healthcare, before outlining the potential use of AI in medical interpreting. Using an image of quadrants segmented by scenario (clinical vs. non-clinical) and customer type (consumer vs. business), he said: I think the field of clinical companies is where the most discussion is needed. ”
When an audience member asked for more information about the general perception among investment committees about the impact AI will have on the language industry, Doan said that in late 2023 and early 2024, there will be “a huge wave of fear, uncertainty, and doubt.” “level of FUD.” But he continued. The bottom line: “I think the continued revenue growth and what we've actually seen over time has eased those fears.”
“We have a long way to go before there is no distinct human element to the translation process.” — Andrew Doane, Senior Vice President, K1 Investment Management
Previously, Doan shared his views on the opportunities found in AI and why the hype may soon die down. “What we found going back a year was that there were some companies that came in right away, maybe over-promised, maybe under-delivered a little bit, but maybe skied out. In the end, there remains confidence that human involvement in language translation is here to stay. “We have a long way to go before there is no distinct human element in the translation process,” Doan says.
After discussing the role they play in supporting their respective portfolio companies, Doane and Govil discuss the current exit environment, M&A deal flow, and the biggest opportunities in language technology and AI investments right now. were invited to share their views.
