The Lisbon-based translation startup Unbabel has been acquired by the US-based company TransPerfect at what sources refer to as a "relatively low price," resulting in substantial losses for many investors.
Despite founder Vasco Pedro calling the deal a "success" that ensures job security and supports growth, several backers, including Explorer Investments, which had invested €4 million since 2023, confirmed they received no returns.
The sale follows a 45% drop in revenue between June 2024 and June 2025, as customers moved to more affordable AI-only translation platforms.
Unbabel's EBITDA remained negative for four consecutive quarters, prompting restructuring and raising concerns among investors. A planned fundraising round collapsed after one investor pulled out, leading to the acquisition.
While some investors with different share structures may have avoided total losses, Explorer formally wrote off its stake, emphasizing that exposure was limited to less than 3% per fund.
Industry observers suggest the deal is more of a rescue than an exit, highlighting how rapidly generative AI is reshaping the translation industry. Meanwhile, two projects launched from Unbabel — the Halo AI tool for ALS patients and the Center for Responsible AI — will continue to operate independently in Portugal.
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