Wednesday, November 28, 2012

A Crowdsourcing Capture Acquisition

At Harvey Spencer Associates annual Capture Conference this past September one of our fearless predictions was that the crowdsourcing market would converge with the recognition applications. While we're not quite there yet, but we are definitely getting closer. Waltham, MA-based Lionbridge, one of the market leaders in crowdsourcing solutions, yesterday announced it had acquired Virtual Solutions. While not an automated recognition ISV,  Virutal Solutions, which is based in Camp Hill, PA, near Harrisburg, is clearly in our market. Historically, it has offered a document imaging-based service for capturing data from primarily state tax forms.

Virtual Solutions has some pretty cool technology for distributing only snippets of documents to ensure security and also has a team of home-based keyers in the U.S. to satisfy the requirements of state tax agencies. Coincidentally, we published a story this past August, in which we discussed Virtual Solutions as a crowdsourcer, even though they didn't advertise themselves as such at the time. 

Lionbridge is a $450 million organization that does the bulk of its business in translation services. It has recently expanded into more general crowdsourcing services and offers its technology as an alternative or compliment to BPO or traditional outsourcing services. It plans to leverage Virtual Solutions' task management platform to help it grow its crowdsourcing business. It also looking at expanding into document imaging-related market like claims and mortgage processing.

According to the press release, "Lionbridge expects to acquire Virtual Solutions, Inc. for a total estimated purchase consideration consisting of $3.6 million to be paid upon closing using Lionbridge’s existing cash resources, $1.0 million of deferred cash consideration, and a $3.0 million earn-out potential payable in cash over the course of three years, subject to the attainment of certain annual revenue metrics."

More on this, including interviews with principals from both sides in an upcoming issue of our newsletter.

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