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Saturday, Jul 13, 2024

South Korean Firm Purchases Systran

Systran, a leading provider of language translation software products, has been acquired by Korean institutional investors to further accelerate growth.

STIC Investments Inc., a South Korean firm, took over ownership of the company from CSLI, which had acquired Systran in 2014. Purchasing 51% of Systran shares, it is now the majority shareholder. Terms of the deal were not disclosed.

The deal had been under discussion since early 2019 but was not quite finalized before the coronavirus hit. CEO Jean Senellart the acquisition will enable the company to expand its new marketplace and translations products across industries.

“This acquisition is exciting and will give us more resources to increase our innovation and delivery speed and geographical footprint, enabling us to further expand through our new Cloud Marketplace offering as well as provide secure, on premises or cloud-based customized translation products for all industries and organizations of all sizes,” said Senellart.

Started in La Jolla

Founded in 1968, the global company got its start in La Jolla by founder Peter Toma. The company began to make a name for itself after landing a contract with the U.S. Intelligence Services to help translate Russian documents into English, throughout the Cold War.

Today, Systran has lasted for more than 50 years developing and selling language translation software products for global enterprises and brands nationwide. Some notable customers include networking hardware company Cisco, multimedia company Adobe, and automaker Ford Motor Company.

One of the most sought-after translation software providers, Systran’s software facilitates communication in 326 language pairs, across more than 20 vertical domains. In particular, their translation software improves relevant searches, content management, customer support, B2B communications  —  playing a pivotal role in scaling global e-commerce.

For example, Adobe can leverage Systran’s machine translation (MT) software to increase international sales within its 100 product offering to customers. In addition, companies use Systran’s translation capabilities for its patents, scientific research, electronic investigation, customer support, among other use cases.

Launched Marketplace

In 2019, Systran launched a cloud-based platform which serves a marketplace for buying and selling translation models. With this solution, Systran is focused on helping industries such as legal, medical, information technology (IT), education and retail.

Systran’s Chief Information Officer and Head of American Operations, John Paul Barraza said businesses that invest in translation technology to become multilingual can immediately increase a company’s bottomline.

“For every $2 million a site is doing in domestic sales, they’re leaving another $1 million on the table in international sales. Becoming multilingual is really a way to expand business for any business,” said Barraza. “Whether it’s a business wanting to expand into different ethnic markets within the U.S. to businesses that want to grow globally to offset headwinds that come from things like economic pandemic, for example.”

A heavily competitive market with players including Google and Microsoft providing solutions in the language translating vertical, Barraza believes the company is well-positioned to remain the market leader.

Systran’s business mix is a fairly even split between private companies and public institutions. Its revenues were $15 million in 2019, up 18% from 2018. Slightly affected by the coronavirus earlier in the year, the company anticipates 8% revenue growth compared to 2019.

Change In Ownership

Throughout its more than 50-year history, Systran has changed ownership a few times. In the 1980s, the San Diego company was sold to a Paris-based family and for a time, was also publicly-traded on the French stock exchange, Euronext Paris. Now owned by a Korean private equity firm, STIC that has $4.5 billion assets under management with an investment portfolio of over 70 companies, to date.

Systran has roughly 100 employees across four offices in San Diego, France, Daejon, and Tokyo. In 2021, the company will open an office in South America and continue growing its headcount by double digits.

Over the next several years, STIC has planned additional investments to further develop Systran’s Marketplace and for future M&A, said Barraza.

The company is also looking to expand in Southeast Asia, as well as South America, Australia, and the UAE as new potential markets.

“Systran is a leading AI company that we have been following for many years. Together with other investors, we believe that Systran can continue leading the language industry, and we are excited to support this new stage of their long history,” said Daniel Kyung Hyung Lee, head of investment division STIC. “The ability to communicate with others in their own language is a key milestone for any international business and we see Systran at the forefront of this capability.”


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