Friday, August 21, 2009

SpinVox Drama Continues

The Register & Techcrunch UK have been doing a great job keeping up with the ongoing soap opera at embattled voice-to-text (once) superstar SpinVox. In a post last month I discussed scandals over the company attempting to pay its employees with stock, despite having been the recipient of $200mil in funding (much of it quite recent), and a BBC investigation that revealed substantial human intervention in the company's highly touted, automated, voice-to-text processing technology. Before these issues came to light, the company had recruited former Alcatel-Lucent CEO Patricia Russo to their board...ostensibly to provide some additional street cred...but clearly she didn't want anything to do with July's drama-fest, and according to reports, she hastily stepped down early this month. Now, The Register is revealing that the company has secured a short-term $50mil loan, due to be repaid in December, from hedge fund Tisbury Master Fund and made its director, John Botts, Chairman of the company (Botts has been on the board & an investor in SpinVox since 2006). The company claims through it's PR firm that it's "comfortable with (their) position," but it smells like crisis to me. I think a comment on Techcruch's UK site sums it up best, "This is a train wreck in slow motion." Speaking of Techcrunch UK, they ran a great piece this morning rebutting a BBC Blog post from Monday which suggested that if SpinVox fails it would be a blow to the reputation of British technology and startups. TC's Mike Butcher took exception to that position and suggest that "its extinction wouldn't matter" because SpinVox is basically a relic of 1999 style dot com investing...whereby big "dumb money" chases surface level tech hotness in the interest of a quick, lucrative exit. Absolutely!...and by the way, there are more than a handful of similar dinosaurs roaming the mobile landscape on both sides of the Atlantic.

1 comment:

  1. The employees who took stock instead of cash for salary last month are probably none too happy to learn that they sit on the back of the bus, with Tisbury and preferred share holders up front (with easier access to the exit, if there is one)