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With the advances of AI in recent years, we believe we are at the start of one of the largest value shifts from human-based services to machine-based services – and language translation is poised to be a huge beneficiary of this technological shift.
The language translation market today is vast, $69B1, and we believe a large majority of that remains human-based services which is ripe for disruption. Machine-based translation constitutes just $1.2B of spend but is expected to grow at a CAGR of 20% to $4B by 20302. Additionally, the increase in quality and the reduction in cost of machine-based translation has greatly expanded the amount of content companies are now translating. We heard this feedback consistently from customers, including leaders in our own portfolio, which furthered our conviction in the growing, strategic market opportunity and the exciting juncture we are at today as technology and research opens up more use cases and drives further adoption of translation than ever before.
As one of the original pioneers of AI translation, DeepL is well positioned to lead this shift, and we are thrilled to partner with them as they continue to break down communications barriers at scale through their Language AI platform.
DeepL’s Language AI platform offers category-leading solutions for writing and translations, specifically tailored for the enterprise. Today, over 100,000 businesses, governments and other organisations rely on DeepL’s language system across 63 markets. In talking with many of DeepL’s customers, the company’s differentiated platform stood out in terms of its quality and accuracy, nuanced vernacular, sophisticated contextualization, in addition to its ease of use, security, and reliability. DeepL customers love that the product is designed to meet them wherever they may have translation needs – delivered as a desktop app, mobile app, browser plug-in, and an API.
A lot of value in the translation market resides in more long-form and technical translations, which have historically been more challenging to automate with human-like quality. Since launching seven years ago with a singular focus on language solutions, DeepL is able to tackle these complex use cases with paramount quality and accuracy which has been a true point of competitive differentiation.
Jarek, DeepL’s Founder and CEO, and the team have deep domain expertise built over many years of singularly building and researching in the AI language space. We have long admired their relentless pursuit of human-like quality, outperforming some of the largest companies in the world in objective industry benchmarks3 and continuing to innovate and invest deeply into research to maintain this edge. At the same time, they have reached significant scale from a commercial perspective. We believe the DeepL team has the depth of understanding, commitment to the complexity of translation and language, product vision, and strength of leadership to build a consequential business in this critical category.
As we look ahead, we are also rapidly moving into a world where human interaction with AI agents will become increasingly common. One critical ingredient to agent realism is conversing across modalities authentically and natively in order to increase believability and engagement. Given its high quality and low latency, DeepL has become a core layer in this stack. We believe the recent launch of DeepL Write and the company’s continued innovation will further embed DeepL at the center of AI communications.
Language is fundamental to human culture and how we identify ourselves. Enabling everyone to express themselves in a way that is most natural and authentic will create a more personal, culturally rich and textured world. We at ICONIQ Growth are thrilled to partner with Jarek and the DeepL team as they continue to chart the course for the future of AI-powered business communication.
Published:
May 22, 2024
