Not long ago, SpinVox was being hailed as a disruptive technology: the answer to 10 million busy people's prayers. Its software, which translates voicemails into text messages, is supposedly powered by D2 or 'the Brain' - 'a combination of artificial intelligence, voice recognition and natural linguistics'. But news that the firm was using call-centre staff to translate messages cast doubt on its capabilities. Investors, who have so far stumped up $300m in funding (including an emergency £15m in August) could be forgiven for feeling a tad nervous.
Danger signs: In July, the BBC discovered from disgruntled call-centre staff overseas that SpinVox used humans to convert more than the odd word it claims. This left founders Daniel Doulton and Christina Domecq facing awkward questions about its technology - which is the big attraction for investors. And according to the Sunday Times, SpinVox's unaudited accounts for 2008 show that pre-tax losses jumped to £49m from £37m a year earlier. Staff have already been asked to take some of their salary in stock to reduce costs, while reports suggest that suppliers are taking legal action to recoup unpaid bills. Now Invesco Perpetual, one of its investors, has admitted that it has written down the value of its own holding in SpinVox by 90%, and claims that the company is up for sale.
Prognosis: Despite the bad press, SpinVox isn't dead in the water yet. Its customer base continues to grow, and with a subscription fee of a fiver a month, it's still generating revenue. It is also doing its best to spin its way out of the technology row, telling the BBC that people are used only to convert the bits that the computer can't understand (whatever that means). Yet sky-high debts give SpinVox little room for manoeuvre, and the patience of its high-powered investors (which include the likes of Goldman Sachs and GLC but, notably, not the big tech-focused VCs) may not last. So pressure for a sale is likely to mount. But in view of recent events, will anyone still want to take a punt on SpinVox's technology?