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24 July 2017

Big deal: Samsung emphasises Innoetics acquisition

Innoetics, a text-to-speech developer based on research at Athena, has been acquired by Samsung in the highest value exit of a Greek spinout in decades.

Author: Thierry Heles, editor

Innoetics, a Greece-based text-to-speech spinout out from the Institute of Language and Speech Processing at Athena Research Centre, has been acquired by consumer electronics manufacturer Samsung in the largest exit for a Greek spinout in decades.

Financial terms were not disclosed, with the deal’s reported value ranging from less than €40m ($43m), according to TechCrunch, to nearly €50m, according to the International New York Times, which interviewed chief executive Aimilios Chalamandaris.

In any case, the acquisition will not make institutional investors any richer. The spinout has been bootstrapped since it was founded in 2006 – even though its technology is one of the most intriguing to emerge from the voice-processing sector in a while.

Innoetics has developed a combination of text-to-speech and synthetic voice-generation technology with a twist – the software can mimic the user’s voice when reading out new text.

The technology is currently capable of handling 19 languages – a number that is expected to increase.

Following the acquisition by Samsung, the spinout will become a wholly-owned subsidiary. Notably, the company will retain its Greek headquarters despite a proposal from Samsung to move operations to the US. The current team of seven staff is set to grow as the spinout becomes integrated into Samsung’s ecosystem.

Both Innoetics and Samsung have remained silent on future plans, though it seems reasonable to assume that the spinout’s technology would find its way into Samsung’s consumer products, such as voice assistant Bixby.

Already, Innoetics has announced on its website that it is discontinuing the business-to-business services on which it had been focusing since its commercialisation push in 2012. That effort had followed critical improvements in generating natural-sounding synthetic voices and resulted in the company winning awards in University of Edinburgh's Blizzard Challenge, a synthetic speech contest, for four years running.

The acquisition also followed reports in the Wall Street Journal that Samsung was working on a voice-activated speaker powered by Bixby in an effort to take on competitors such as Amazon and its Alexa speaker.

Crucially, Innoetics’ technology should also give Samsung a much-needed boost in bringing Bixby to English-speaking markets. The voice assistant was hampered by a lack of big data on the various English accents and launched in the US last week after months of delays.

Meanwhile, Athena itself has had its confidence boosted and is set to produce more spinouts. Yannis Ioannidis, president and general director of Athena, said: “We are very proud and excited about this unique success of Innoetics.

“Visionary basic research by an Athena team was the fundamental part of a journey that, propelled by hard and systematic entrepreneurial efforts, led to the creation of a world-class voice technology company, worthy of Samsung’s acquisition. 

“Athena will build on this experience to promote and support new high-risk out-of-the-box efforts from its researchers, and to augment its capacity to turn research results into efficient technological solutions and new business initiatives.”

For Chalamandaris, who co-founded Innoetics with Pyrros Tsiakoulis, Spyros Raptis and Sotiris Karabetsos – all three electrical engineering graduates from National Technical University of Athens – Athena’s continued support was crucial in the spinout’s success.

Chalamandaris told the International New York Times: “[Athena] believed in the company’s business prospects and backed it from the start. They gave us everything we needed. The greatest obstacle for a researcher who is trying to commercially exploit his ideas is the need to change the logic of his approach.

“On the research level, your idea only needs to work on the computer. For it to become a product, it has to be able to meet different requirements, to work on different operating systems and so on. We needed help to get into that frame of things, and Athena gave it to us.”

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