MultiLingual Magazine had the chance to talk to Bob Willans, CEO of XTM International, via email about the funding they recently received from K1 Investment Management. The following is a transcript of that exchange, lightly edited for clarity.
MultiLingual: How did K1 find XTM?
Bob Willans: K1 originally reached out to us during the second half of 2020. We had been approached by many private equity firms over the past few years, but the match with K1 was a lot closer than the rest as they uniquely focus on building category-leading enterprise software-as-a-service (SaaS) companies. It was refreshing to see that they had done their research and clearly knew a lot about the translation market already.
ML: Why K1?
BW: Because they specialise in partnering with high-growth, enterprise B2B SaaS businesses and are able to provide expertise and assistance to us via their operations team.
ML: Why now?
BW: At the time we were working with Ernst & Young on their Fast Growth platform, which put us in a great position to be able to respond to K1.
ML: Is this essentially a buyout like the Memsource deal? Or is this more of a venture capital round?
BW: K1 have invested in XTM International to give us additional resources to accelerate our growth.
As a result, we have now prepared aggressive growth plans, which will involve building out the senior management team, increasing our sales and marketing presence and upgrading our internal systems. This will mean an increased visibility of XTM in the market and an improved service for our clients.
We will also accelerate our product roadmap for XTM Cloud. This includes adding additional AI features to help translators and project managers based on our proprietary technology Inter Language Vector Space, creating additional connectors for CMSs to automate workflows and supporting more file formats for XTM Visual Mode to provide in-context translation and review.
We are planning to offer our global clients enhanced support services to provide additional coverage in their time zone.
ML: On a more abstract level, what went wrong during the deal that other TMS companies who are seeking investors can learn from? What advice would you have for them?
BW: Not much [went wrong], but preparation was vital! We were working intensively with our advisors EY for over 2 years prior to the deal. It was a steep learning curve for us all about managing a company growing at our rate of more than 50% pa and in particular about the importance of key metrics for a SaaS business.
ML: Are you staying there long term, or just for a transition period?
BW: Andy Zydron and I plus all the senior managers are staying with the business and are excited about the next phase of growth. It will be business as usual, but with additional velocity and scale provided by this investment.
ML: Lastly, why do you think we’ve seen so many deals close in the last month? Who do you think will sell next?
BW: The translation technology market is undergoing major innovation and growth. The industry is rapidly migrating from being a people intensive process to one where technology is the decisive factor. Without the right TMS global enterprises and LSPs miss opportunities to localise more content, quicker, at lower cost and higher quality. The M&A activity is also brought about by companies seeking to consolidate their position, which we think is likely to continue. With K1, XTM International will be partnering with a company that has all the resources and drive to be the leader in the TMS field.