Editor’s note: Triangle-based Polyglot Systems achieved an “exit” two weeks ago, being acquired by California-based First Databank. The sale ended a 13-year trek for the company, which WRAL TechWire profiled for the CED Venture Conference in 2004. Here’s that profile and interview with then-CEO Stephen Noe, part of our look back through the archives as WTW observes its 15th anniversary. At the time, Noe described Polyglot’s exit strategy: “Our current growth strategy offers several exit options in the future. We are considering either a public offering or an acquisition by a larger company in three to five years.”
MORRISVILLE – Any company in the health care business that faces the challenge of “No habla Ingles” might want to check out Polyglot Systems.
“We offer the only known technology-based solution for the rapidly growing need for interpretation services in the healthcare market,” Chief Executive Officer Stephen Noe tells Local Tech Wire. “Healthcare facilities are required under federal law to provide language access free of charge to patient.”
Thus the name of the company. Polyglot is defined as “knowing or using several languages” or “having the text translated into several languages.” Polyglot will make its case to investors at Venture 2004 on Tuesday afternoon.
With the population of English as a second language growing quite quickly in the United States, healthcare firms need a solution such as the one provided by Polyglot, Noe says.
“Polyglot encompasses a unique combination of medical informatics, linguistics, and technical expertise that gives us a unique perspective into in our market,” he explains. “We have developed a proprietary core-technology that allows us to quickly build and deploy language interpretation solutions across any industry and on multiple computing platforms. We have patents pending on key aspects of our technology and copyright protection on our product content.”
The company already has one product on the market, and it does not require human intervention.
Polyglot’s answers to LTW’s Q&A:
Given the difficult investment climate, have you explored or used other means of getting funds than venture capital? If so, please explain why you remain interested in venture capital. Are investors telling you that the climate for making deals is improving? Please explain.
We have investigated many different routes of funding. Some of the best advice we received have come from venture capitalists:
1) build the business, 2) gain customers, and 3) prove your model.
We started our business using self-funding and progressed to an initial round from friends and family. This process has given us better appreciation and kept us focused on building the business. We’ve hired quality management who believe in our company and were willing to work for equity in the company. We also managed to keep our burn rate low, being careful about spending and being creative in how we use our resources.
However, we do believe that venture funding can provide opportunities for faster market penetration and future growth into other industries. As the economy continues to improve, we are seeing more interest from venture companies and they appear to be regaining confidence in their investments. We have positioned the company to be prepared as that happens.
If you had only one chance and one paragraph to convince an investor, how would you answer this question: “Why should an investor choose your company?”
Polyglot Systems, Inc. offers an innovative, solid business in an industry that is struggling to keep up with a growing problem. We offer the only known technology-based solution for the rapidly growing need for interpretation services in the healthcare market. Healthcare facilities are required under federal law to provide language access free of charge to patient.
With the growing population which cannot speak English, this is causing a tremendous strain on the healthcare system. Our product, ProLingua, is complete, clinically tested and is now available to hospitals at less than one third the cost of existing alternatives. We have IP protection, and created our technology to ensure rapid development of follow-on products for healthcare and other markets. Our leadership in this untapped market with an innovative product makes Polyglot a sound investment decision.
What is the “pain point” (or points) you address for your customers?
Title VI of the Civil Rights Act mandates that all federal agencies and organization which receive federal funds, must provide language interpretation to LEP (Limited English Proficient) persons at no charge. Failure to comply is considered discriminatory and jeopardizes federal and state funding under all federal programs such as Medicare and Medicaid. In the U.S., this LEP population has increased from 14 million to 20 million during the past decade and the impact on hospitals has been substantial. Hospitals nationwide are scrambling to address LEP needs while at the same time being under pressure to control costs. Our products help hospitals satisfy their Title VI obligations at costs far lower than any current alternatives.
What makes your company unique? Do you have a proprietary and/or a patented technology? Please explain why it is unique and what the status is of any patent filings.
Polyglot encompasses a unique combination of medical informatics, linguistics, and technical expertise that gives us a unique perspective into in our market. We have developed a proprietary core-technology that allows us to quickly build and deploy language interpretation solutions across any industry and on multiple computing platforms. We have patents pending on key aspects of our technology and copyright protection on our product content.
What makes your product(s) and/or services unique vs. your competition? (Who is your competition, and what do they offer?) If you have no competition, why not?
Our competitors provide expensive, human-based interpretation either via telephone or on site. Our products are unique because we are the only practical, technology-based interpretation solution in the medical arena. Technology allows us to offer our product at a cost substantially lower than our competition and to a wider audience.
Does your company already generate revenue? If so, how much? Are you cash flow positive?
We had our first customer in early 2004 and have started generating revenue from our first product, ProLingua ED. This is a very exciting time for us as it validates the two years of product development. We expect to be cash flow positive by late 2004.
What is your target market? What is the size of that market in terms of dollars? What share of that market do you believe you can win?
Polyglot has selected emergency departments, hospitals and urgent care centers as its initial target customer segment. In the U.S. there are approximately 5,000 hospitals, 4,400 emergency departments, and 8,000 urgent care centers. Based on market research, we estimate a potential U.S. market for the healthcare industry of approximately 22,000 units. At current pricing this translates to a potential market size of over $200M annually in healthcare alone. Our goal is to capture at least 30 percent of that market.
What will you do with the invested funds? What is the timeline for product delivery? If you have existing products and services, how will additional funding help you expand your company, if that is the intention, or will you develop new products?
The majority of the capital raised in this round will be used for sales and marketing and the addition of new languages to our ProLingua product line. Development of new products modules requested from the market will be added over the next 12-24 months, allowing us to sell more products to our existing customer base.
What do you want from an investor other than money?
Primarily, we are looking for a “good fit” between the venture firm and our organization. We are looking for leadership and management experience in our market space to complement our team. Secondarily, exposure to other portfolio companies with potential synergies would be very beneficial as we develop partnerships in the future. In summary, our goal is to maximize the use of our investors’ knowledge, experience, and relationships for the benefit of the company.
Why will investors be impressed with your management team?
Our management team combines a diverse set of experience in medical informatics, technology, entrepreneurial startups and business management. Our team has managed to develop an innovative product with limited resources. All of our team members are dedicated to our company and in providing value to all of our shareholders.
What is the exit strategy for the investor from your company? Are there potential strategic alliances with larger companies? Do you wish to take the company public? Or do you wish to grow the company and either sell it or acquire other companies?
Our current growth strategy offers several exit options in the future. We are considering either a public offering or an acquisition by a larger company in three to five years. Candidates include medical system providers, electronic medical record companies and language translation companies.
