Private equity fund Anacacia Capital has invested in language technology company Appen.
Anacacia did not disclose the size of the investment but the private equity fund normally invests in small- to medium-sized businesses with revenues between $10 million and $50 million and profits of $1 million to $10 million.
"We started doing research on the language services industry and tried to find a good Australian business that was really well managed. The market is over $1 billion a year," said Anacacia managing director Jeremy Samuel.
Chris Vonwiller started the business with his wife, Julie, in 1996. He has watched the business grow to 140 full-time equivalent staff, half of whom work at the company's premises in Chatswood on Sydney's north shore.
Mr Vonwiller did not release exact revenue figures other than to indicate they were within Anacacia's usual range. He said 98 per cent of revenue was earned offshore.
Appen supplied the intelligence, technology, call centre and automotive industries with applications that processed text, speech and language, he said. Uses included the speech recognition feature of mobile phones. The company also worked with the US defence industry on speech translation.
"Having an external partner that has access to additional lines of capital is strategically a good way to go," Mr Vonwiller said.
"We're established in North America and we'd like to do more over there. Probably for the immediate future China and India are very much markets we would like to invest in."
Following the transaction, Anacacia will acquire an undisclosed share of Appen which has been wholly owned by the Vonwiller family and Mr Samuel will sit on the board.
© Australian Financial Review 2009