The Graz startup iTranslate, with its award-winning translation app, will be acquired by IAC Applications. CEO Alexander Marktl and CTO Andreas Dolinsek remain on board to drive global expansion. i5invest managed the transaction.
The IAC Applications belongs to the media and Internet company IAC, which owns companies and products such as Match, Tinder, Vimeo and also European companies such as MyHammer and MyBuilder. The Graz startup achieved worldwide fame in September 2015, when Apple COO Jeff Williams presented their translation app as part of a special event keynote as one of his personal favorites. In mid-2017 they launched the first translation wearable for automated simultaneous translation.
Many takeover bids, no investors
They were a coveted investment and buying target. After many missed takeover offers, they decided to sell. With its global network, IAC Applications brings strategic synergies and new, previously unattainable resources. These should additionally accelerate the strong growth path. Alexander Marktl and Andreas Dolinsek will be driving the global expansion of iTranslate from Graz and establishing a global competence center for IAC in Graz. Tim Allen, the CEO of IAC Applications, which owns hundreds of applications for mobile devices, desktops, and browsers, wants to further accelerate their own growth with the talented team of iTranslate.
The founders quit their studies over ten years ago to launch their translation software as one of the world's first 1000 apps in the Apple App Store. "It was never necessary to get an investor on board. We always had the cash flow ourselves," Marktl said in autumn 2016. The size of the investment was not announced publicly, however, we may assume that it’s a fair sum. In the autumn of 2016, Marktl said that they had been offered an amount in the eight-digit range.
App subscriptions as a successful business model
The founders owe their entrepreneurial success to their subscription model. With the free version of the app, translations in more than 100 languages are possible. Additional features such as offline mode and voice recognition are offered with the paid subscription: an annual subscription will cost you 39,99 EUR. Marktl saw the only reasonable business model for apps in subscriptions: "Pay once and get updates forever cannot work. The consequence is that many apps are no longer maintained." Through the subscription system, you can constantly deliver updates.
Turnover and downloads tripled
Since its foundation, iTranslate has been installed over 80 million times on iOS and Android devices. Turnover was tripled in 2017. Only a fraction of the turnover comes from Austria, the largest part is from the USA. Patrick Prokesch and Herwig Springer from i5invest accompanied the transaction on the seller side and have worked closely with the founding team over the past two years. "We successfully drove forward the launch and expansion of the subscription business model, and together expanded the company's growth and internationalization."
Read the full article on derbrutkasten.com (in German).
Foto: Zach Roseman (VP of Operations, IAC Applications), Andreas Dolinsek (CTO, iTranslate), Alexander Marktl (CEO, iTranslate) and Tim Allen (CEO, IAC Applications) (c) Michael Beck