One Hour Translation Due-Diligence Summary Michael Vaknin OHT is a global language localization company. OHT has an impressive deep-tech platform, but it failed to monetize it. It had weak leadership and a flawed go-to-market (GTM) strategy. Last year, Fortissimo - a top Israeli PE firm and OHT’s investor - led a major management change and a comprehensive GTM overhaul. Lion is partnering with Fortissimo to raise capital for OHT. The deal is priced very attractively at a distressed multiple over a rock-bottom revenue. We are upbeat about the restructuring plan, which is already poised to lift revenue by 60% this year. Our baseline is for a x4 CoC return within three years, predicated on a major growth acceleration and multiple normalization. The backdrop About OHT One Hour Translation (“OHT”) is a global language localization platform, based in Israel. It serves 8K+ customers in 120 languages. OHT has a differentiated technology that allows it to operate at a superior gross margin of close to 50%. The broader industry operates at a lower 30-40%, owing to the very complex workflow of endless translation iterations over many email threads between many stakeholders. OHT’s superior efficiency lies in its end-to-end platform. Specifically, it has: (i) a highly automated machine translation that makes its pool of 25K human translators very efficient (ii) vast software integrations and APIs, and (iii) seamless stakeholder access to every step of the localization process. 2014-2019: A failed growth model OHT raised $10M in series A back in 2014, but failed to deliver on the growth promise (Chart 1). It is now getting a second chance to recalibrate its GTM strategy. The post-mortem analysis is clear - OHT did not know how to scale in the enterprise world, and failed across the customer journey - acquisition, support and expansion. This was mostly due to inexperienced management, a weak sales force that operated remotely from Israel, and the fact that there was no customer success team at all. As a result, customers started churning in 2017, and revenue started falling. The revenue bleed culminated in 2020, when covid surfaced and prompted unhappy customers, including Facebook - its largest account at the time - to cut their orders. OHT ended 2020 at a rock-bottom revenue of $11.6M 

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OHT Due Diligence (Vaknin).pdf

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