The size and state of the language services industry, including ranking of top 100 LSPs by revenue.

March, 2018 First edition

ABOUT NIMDZI

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Who we are

The language services industry is growing and there is no end in sight. For your company to dominate the competition and be ahead of the game, you require insight – and that is exactly where we come in. We come from diverse backgrounds in the language industry. We are a market research and international consulting company made up of analysts, consultants, LSP experts, and researchers. But we are all connected with one united goal – Helping our clients succeed.

And yes. We know the industry.

What we do

With a global team management approach, we work directly with you, learning the ins and outs of your business so that we can help to customize and tailor your business needs on the global stage. When you localize your message to prospective global customers, you reach them on a much deeper level and that only means one thing – customers are engaged and interested. We help you to better understand and connect with your demographic.

We build actionable insights and reports that cater specifically to your products and services. We provide the window into the ever-changing translation and localization industries. Working with us means building relationships with influential players – an essential part of penetrating your market.

The future lies directly in the global market. We get inside the head of the localization users and focus on factors that are important to them. We research. We report. We advise. We direct. We guide.

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Looking to move into the global market? Want to establish the ultimate customer experience? Need some insight into how to adapt your products and services to have the look and feel of your target market? Dreaming of creating an ultimate user experience – one that will help to advance your marketing strategy and drive your business goals?

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CONTENTS

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RESEARCH TEAM Meet the analysts

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NIMDZI 100 (LSP RANKING) The largest LSPs in the industry

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WATCH LISTS Additional LSPs to keep an eye on

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METHODOLOGY Our investigative approach

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GROWTH Which LSPs are growing

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MARKET SIZE The largest LSPs in the industry

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PATHS TO GROWTH LSP Strategies for growing with the market

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MARKET ANALYSIS Analyzing the findings

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CONCLUSIONS Final thoughts

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RESEARCH TEAM

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Konstantin Dranch Language industry researcher, speaker and event organizer, Konstantin can be said to be the brains behind Nimdzi’s primary research machine. Formerly a business journalist and a strategist in a language technology company, he has unique insights into every situation. As Chief Researcher, Kostya makes sure that the data is being looked at from all possible perspectives.

Renato Beninatto CEO and co-founder, Renato brings decades of experience everywhere he goes. With extensive experience in international consulting, market research, sales and marketing, Renato provides the strategic direction that helps Nimdzi better serve clients worldwide.

Tucker Johnson As Managing Director and co-founder, Tucker takes Renato’s crazy ideas and puts them into action. Specialized in vendor side operations, global team management, large program outsourcing, and supply chain governance, Tucker is happy to share his operational experience with Nidmzi’s partners.

OTHER TEAM MEMBERS

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Sandra Olivera Sandra arguably holds the most important role on the team as the head of business development. Nimdzi’s mission is to provide a much-needed service by providing information and insights on language services. This means it is important to stay in touch with our clients and partners. Sandra is responsible for keeping Nimdzi’s fingers on the pulse of the industry. She coordinates outreach, collects feedback, and makes sure that the rest of the team stays laser focused on topics that matter most to our clients.

Carreen Schroeder Carreen has worked in the language industry for over 20 years and has extensive experience as a translator, localization specialist, editor, copywriter, and educational researcher. Carreen goes above and beyond to research and deliver engaging, polished, and informative content often with a unique and entertaining twist. Carreen’s passion for language truly borders on the obsessive so she fits right in with the Nimdzi team!

Rachael Ryan

A conference interpreter who was too curious to stay in the booth, Rachael decided to delve into research. With her enthusiasm for languages and appetite for statistics, she is meticulous in extracting insights from whatever needs exploring. Languages and insights means only one thing… she’s right at home at Nimdzi.

NIMDZI 100

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Chances are, the information you came here for is the Nimdzi 100 Ranking, which is presented in the table in the following pages, where we rank the top language service providers by revenue worldwide.

LET’S JUMP RIGHT IN, SHALL WE?

NIMDZI 100

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Rank Company Country Revenue (USD millions) Note

1 Transperfect United States 615.0 v

2 Lionbridge United States 598.0 v

3 Mission Essential Personnel United States 576.5 e

4 Global Linguist Solutions United States 570.0 e

5 LanguageLine United States 450.0 v

6 RWS United Kingdom 380.0 v

7 SDL United Kingdom 367.0 fy, v

8 Hogarth Worldwide United Kingdom 257.5 v

9 Keywords Studios Ireland 248.0 v

10 SDI Media United States 220.0 e

11 Welocalize United States 200.2 v

12 Amplexor International Luxembourg 197.3 e

13 STAR Group Switzerland 164.6 v

14 CRESTEC Japan 132.7 e

15 CyraCom International United States 130.0 e

16 appen Australia 127.7 fy, v

17 BTI Studios Sweden 108.2 v

18 Semantix Sweden 103.0 v

19 Honyaku Center Japan 94.5 e

20 Pactera China 85.2 v

NIMDZI 100

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Rank Company Country Revenue (USD millions) Note

21 Donnelley Language Solutions United States 84.7 v

22 Ubiqus France 82.3 e

23 United Language Group United States 79.0 e

24 thebigword United Kingdom 76.9 fy

25 Datawords France 65.0 v

26 Logos Group Italy 59.8 v

27 Språkservice Sweden 59.1 e

28 Technicis Group France 50.7 v

29 KERN Germany 50.6 v

30 Transn China 49.0 v

31 CSOFT China 45.0 v

32 Morningside Translations United States 42.8 v

33 Verztec Singapore 41.0 v

34 Akorbi United States 39.7 v

35 Vistatec Ireland 39.5 e

36 VSI United Kingdom 39.1 e

37 SunFlare Co Japan 39.0 e

38 SeproTec Spain 37.3 v

39 Certified Languages International United States 36.8 v

40 CTS LanguageLink United States 36.0 e

NIMDZI 100

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Rank Company Country Revenue (USD millions) Note

41 Telelingua Belgium 33.8 v

42 Stratus Video United States 33.5 e

43 TvCN Netherlands 32.7 v

44 xplanation Belgium 31.8 v

45 Livewords Netherlands 31.3 v

46 LanguageWire Denmark 30.4 v

47 Language Services Associates United States 29.0 e

48 ZOO Digital Group United Kingdom 28.0 fy

49 MultiLing United States 25.0 e

50 Alpha CRC United Kingdom 24.8 v

51 Wieners+Wieners / Apostroph Group Germany 24.7 v

52 Sunyu China 24.0 v

53 InDemand Interpreting United States 23.1 e

54 Techtrans United States 23.0 e

55 Skrivanek Czech Republic 22.0 v

56 Capita Translation and Interpreting United Kingdom 21.9 v

57 Abbyy LS/Traktat Russia 21.4 v

58 Argos Multilingual Poland 20.3 e

59 CBG Konsult & Information Sweden 20.2 fy, v

60 ProTranslating United States 20.1 e

NIMDZI 100

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Rank Company Country Revenue (USD millions) Note

61 Jonckers Belgium 20.0 v

62 Janus Austria 20.0 v

63 Translated Italy 19.2 v

64 HL TRAD France 18.6 v

65 Rozetta Corp. Japan 18.3 v

66 AAC Global Finland 18.0 v

67 EC Innovations China 17.9 v

68 Straker Translations New Zealand 17.5 e

69 CQ Fluency United States 17.3 v

70 MasterWord United States 17.2 e

71 Lan-bridge China 17.0 v

72 NLG GmbH Germany 16.8 v

73 VITS LanguageLoop Australia 16.7 fy, v

74 Amesto Translations Sweden 16.3 v

75 MultiLingual Solutions United States 16.0 v

76 Transline Germany 15.8 e

77 TRSB Canada 15.4 v

78 Multicultural NSW Australia 14.6 fy, v

79 Japanese Assistance Network Japan 14.0 v

80 Nordisk Undertext Sweden 13.5 v

NIMDZI 100

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Rank Company Country Revenue (USD millions) Note

81 Globo United States 13.2 v

82 Lingo24 United Kingdom 12.9 e

83 itl Germany 12.7 v

84 EGO Translating Company Russia 12.5 v

85 mt-g Germany 12.4 v

86 LocTeam Spain 12.4 e

87 Lingsoft Finland 12.3 v

88 ICA Language Services United States 12.1 e

89 Ingenuiti United States 12.0 v

90 Hero Tolk Norway 11.7 v

91 Acclaro United States 11.7 v

92 ISI United States 11.5 v

93 Lylo France 11.4 e

94 Dynamic Language United States 11.3 v

95 Diction Switzerland 11.2 e

96 One Hour Translation United States 11.1 e

97 Snelvertaler Netherlands 11.0 v

98 A.D.T. International France 10.8 v

99 Language Connect United Kingdom 10.7 v

100 HansemEUG Korea 10.6 v

WATCH LISTS

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Language services providers without a definitive revenue estimate

In the below table we list companies that have had significant impact on the market, but for which Nimdzi was not able to get reliable data as of the publication date of this release.

Medium: we believe that the company (or business unit) generated between USD 10 and 30 million in language services revenue in 2017.

Large: the company (or the business unit) generated more than USD 30 million in language services revenue in 2017.

Company Headquarters Size 24translate GmbH Germany medium

American Language Services United States medium

Angel Translation Corporation China medium

Cloudbreak United States large

CPSL Spain medium

Crimson Interactive United States medium

EasyTranslate Denmark medium

Enveritas Group, Inc. United States medium

Gengo Japan medium

Human Science Co. Japan medium

IDC Digital United States medium

Interpreters Unlimited, Inc. United States medium

Intertext Fremdsprachendienst Germany medium

Iota Localisation Services Ireland medium

WATCH LISTS

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Company Headquarters Size ITC Interpreti e Traduttori Italy medium

IYUNO Singapore large

Lingotek United States medium

Medialocate United States medium

Motionpoint United States medium

Oncall Australia large

PTSGI Taiwan medium

REV United States medium

Salita TT Norway medium

Smartling United States medium

Syntax Übersetzungen Switzerland medium

Tradutec Cabinet Bonnefoux France medium

Translingua United States medium

Transvoice Sweden AB Sweden large

Trusted Translations United States medium

Venga Global United States medium

WCS Group Netherlands medium

Webdunia India medium

WordTech International China medium

WATCH LISTS

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Language services business units inside larger corporations

Large-scale clinical research organizations, digital marketing agencies, auditors, technical documentation developers, and even retailers like Alibaba have language services business units that complement their service offering. In some cases, the billions in revenue from the core business in some of these companies makes the proceeds from the translation business units seem like nothing more than rounding errors.

Because of this, it is not always possible to distinguish the language service component from the larger organization. Yet, some of these language services business units make far more than USD 10 million. Therefore, they are relevant for an in-depth analysis of the industry because they compete with conventional market players for the best talent and the best clients.

Company Headquarters

Alibaba China

Deluxe United States

DXC ACG United States

GTCOM (Global Tone Communication Technology) China

Icon + MAPI France

L3 Communications United States

Maruboshi Co, part of CMC Corporation Japan

Northrop Grummann United States

Obsidian Healthcare Group United Kingdom

Poletowin Pitcrew Holdings Japan

Technicolor United States

TVT United Kingdom

Viacom United States

ZVRS United States

WATCH LISTS

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US government contractors

There is a large market that exists in the United States parallel to the conventional language services industry: providing language specialists and intelligence analysis services to the American military and government agencies. Companies operating in this space have low margins and very high volumes. Because many of these contracts are classified, the size of this market is more difficult to assess.

However, some reliable extrapolations can be made from the publicly available data from the General Services Administration (GSA) and occasional media publications. After some investigation, Nimdzi has gathered enough data to estimate this market segment at a range from USD 5 to 15 billion per year.

Company Headquarters Size ($USD mil) MVM United States 200.0

SOS International United States 182.0

Metlang, Metropolitan Interpreters & Translators United States 50.6

CWU United States 49.1

Worldwide Language Resources, Inc. United States 46.6

Mid Atlantic Professionals (SSI) United States 42.8

Allworld Language Consultants Inc. United States 42.0

CALNET United States 26.0

Kapsuun Group (Chenega Corp) United States 20.0

Valbin United States 17.0

Global Language Center (GLC) United States 17.0

Global LT Language Solutions United States 14.0

Advanced Language Systems United States 13.7

McKellar Corporation United States 12.0

Conduit Language Specialists United States 12.0

Comprehensive Language Center United States 10.0

JTG United States 9.5

METHODOLOGY

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In the course of this market analysis, Nimdzi has uncovered prominent LSPs that have previously been invisible in market reports because they do not participate in surveys and are reluctant to disclose their revenue. Nimdzi has employed an investigative approach and invested countless hours into intense research, data collection, and analysis to present data that have previously been unavailable.

We are very proud to offer broad access to our data. This report is offered to all who are interested. No paywall. No strings attached. Localization buyers, investors, savvy job seekers, and analysts are welcome to use this document, just don’t forget to reference Nimdzi Insights LLC as the source. Interested parties are free to reach out to us directly should they have any questions.

METHODOLOGY

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We concentrated on identifying LSPs with USD 10 million or more in revenue with the assistance of in-country experts. In most countries, there are only a few providers of that size, and they are impossible to hide from local competitors because they hire staff, take part in requests for proposals, and employ a large number of translators. Once we identified the relevant LSPs, we researched information that could help us make more accurate estimates of their size and talked to the management directly to verify findings.

We’re listing full company revenue, not just language services revenue. It is not possible to separate these in external sources of information, such as annual reports, press releases, and stock listings, which provide the foundation for our work. To separate LSPs from other types of companies, we’ve decided to include organizations in the ranking only if language services make more than 50% of their income. Language services business units inside large organizations are featured in a separate list.

This is a live document. Nimdzi reserves the right to publish revisions. We expect some players to submit new or revised financial figures and we may release a second edition of the ranking, if material and appropriate.

We use data from the latest fiscal year for each company. This means the numbers for some companies will not reflect 2017 calendar year revenues. We are aware that this may complicate comparison between companies, which is why we have clearly marked companies with non-standard fiscal years in the Nimdzi 100 Ranking.

Our definition of language services includes: translation, transcreation, localization, multilingual desktop publishing (DTP), language quality assurance, linguistic testing, multilingual copywriting, multilingual technical writing, language project management, interpreting, video remote interpreting, telephone interpreting, linguist verification and staffing, media localization, versioning, adaptation, subtitling, voice over, dubbing, machine translation, training machine translation engines, cultural consulting, and related services.

Growth rates are calculated in the company’s reporting currency. For example, a German company that reports revenue in euros has its growth rate calculated in euros. But when we rank it in the table against other companies we use USD as a common denominator.

We use average annual currency conversion rates to US dollars for each day of trading in 2017.

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2 3 4 5 6 7

GROWTH

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Language services remains a growth market. Out of the companies for which we have reliable data for the last 3 years, 80% grew in revenue, while only 20% stayed the same or shrank. Nimdzi estimates the market as a whole will grow at 7.4% CAGR for the next 5 years.

In comparison to the average market growth rate, leading companies are growing at a rate of 12%. In many individual cases, this faster growth is driven by acquisitions, which greatly influenced the market in 2017, as can be seen in the table below.

Fastest-growing companies with recent acquisitions

Company Acquired Before, (M) After, (M) Currency 2y-growth, %

Keywords Studios 18 companies 63.2 220.0 EUR 248%

RWS Group CTi, LUZ and Moravia 95.2 285.0 GBP 199%

Wieners+Wieners / Apostroph Group

Apostroph Group with Transcript in Switzerland 11.0 24.7 USD 125%

appen Mendip Media, Leapforce 83.0 166.0 AUD 100%

Technicis Translation Probst, Arancho Doc 24.0 45.0 EUR 87%

United Language Group Lucy Software, Language Select, Merrill Brink International, KJI 45.0 83.0 USD 84%

HL TRAD CPW, Semantis 9.0 16.5 EUR 83%

xplanation Matrix Communications 17.0 28.3 EUR 66%

Datawords vanksen 30.0 50.0 EUR 66%

ABBYY LS Traktat (merger) 828.3 1,250.0 RUR 50%

Acquisitions made by RWS Group and Keywords Studios propelled them to the Nimdzi Global Top-10, also increasing their capitalization to previously unseen values. While RWS paid more than twice the turnover for Moravia, its stock price now put the company’s capitalization at 4.5x the combined turnover. Same with Keywords – they are valued at 5x their revenue at the time of this report. The effort invested into acquisitions and funding pays well. In other words. For every dollar invested in acquisitions, companies tend to see an immediate two-dollar return in their market capitalization. Like magic!

GROWTH

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In France, the leading LSPs have been completely transformed by acquisitions in 2016-2017. Both Datawords and Technicis, the 2nd and the 3rd players in the market practically doubled revenue over two years. Datawords acquired a digital agency Vanksen, and Technicis has snapped up Arancho Doc in Italy and Translation Probst in Switzerland. HL Trad, another company in France’s Top-10, has also increased revenue significantly with acquisitions.

This data is not intended to imply that these companies are growing exclusively through acquisition. Organic growth also plays a role.

Organic growth leaders

Company 2015 FY (M) 2017 FY (M) Currency 2y-growth, % ZOO Digital Group 11.50 28.00 USD 143%

VSI 16.10 30.40 GBP 88%

Lan-bridge 66.00 115.00 RMB 74%

Akorbi 24.40 39.70 USD 62%

NLG 9.85 14.90 EUR 51%

Language Connect 5.80 8.33 GBP 43%

Certified Languages International 26.03 36.80 USD 41%

Jonckers 13.04 17.70 EUR 35%

Verztec 30.41 41.00 USD 34%

Telelingua 22.61 29.97 EUR 32%

Transn 38.40 49.00 USD 27%

thebigword 42.50 59.70 GBP 26%

Companies with organic growth each have an individual unique driver. We can make few generalizations in the current report.

Some of them are in a booming sector. For example, VSI is a Netflix preferred vendor, and Netflix has increased localization spent significantly over the last two years.

Some have landed a large contract. For example, thebigword has won Ministry of Justice interpreting framework agreement in the UK.

Most are developing their salesforce and customer service functions.

MARKET SIZE

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There are more medium and large companies than meets the eye

During several months of research, Nimdzi identified over 170 companies providing language services with revenue in excess of USD 10 million. This is not a final number, as there are certainly more players in the global marketplace. We uncover more information daily.

Large companies generate USD 10 billion, total market volume exceeds USD 50 billion

Together, medium and large LSPs we’ve identified generated just under $10 billion in revenue in 2017. Note that this includes large known companies that are not included in the Nimdzi 100.

By extrapolation, this puts our conservative estimate of the market volume at USD 50 billion for 2018. With a CAGR of 7.4%, Nimdzi believes that the market could reach USD 66.5 billion by the end of 2022.

Figure 1: Industry is expected to grow at 7.4% CAGR through 2022 to USD 66.53 billion.

MARKET SIZE

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Market is still highly fragmented

Even with the continuing trend of consolidation in the industry, the language services market remains highly segmented, with the top 100 companies comprising approximately 15% of the total global market for language services.

Figure 2: Despite continued consolidation, the market is still highly fragmented.

PATHS TO GROWTH

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There isn’t a single dominant business model that propels companies to the summit of the language industry (at least in terms of revenue). Companies currently at the top have arrived there with very diverse types of the core businesses.

PATHS TO GROWTH

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GLOBAL TRANSLATION GENERALISTS

Each has scale, a network of offices, a technology offering, and a diverse portfolio of global customers

Transperfect Lionbridge SDL Welocalize Star Group Donnelley Language Solutions

PUBLIC SECTOR CONTRACTORS

These companies win large-scale government contracts for military and civil offices

Mission Essential Personnel Global Linguist Solutions thebigword MVM SOS International

MEDIA LOCALIZATION POWERHOUSES

Offer subtitling, dubbing and other services to broadcasters and online streaming sites

Deluxe Media SDI Media BTI VSI

MULTILINGUAL MARKETING AGENCIES

Develop marketing content & multimedia with a dash of multilingual

Prodigious Hogarth Worldwide

BUY & BUILD NEW LEADERS

Have rocketed to the Top 20 in 2018 after acquiring other language services companies

RWS Keywords Studios

TELEPHONE INTERPRETING COMPANIES

Hold contracts and SLAs for phone interpreting with government institutions and large private customers

LanguageLine Cyracom

MARKET ANALYSIS

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Revenue is vanity, but profit is sanity

The largest companies have very different cost structures, profitability levels, and valuations. For example, although they have similar revenues, Lionbridge was acquired by a private equity firm for USD 360 million, while Transperfect’s courtroom-brokered deal valued them at USD 770 million.

At the same time, market capitalization for publicly-traded companies, RWS and Keywords, hovers above USD 1.3 billion each. Similarly, LanguageLine sold for a record USD 1.52 billion in 2016.

The US is the most promising growth market

Figures 3 and 4 show the heavy concentration of large LSPs in the United States. North America is home to many of the world’s top accounts, and LSPs are set up to service them locally.

English-speaking regions

Revenue growth in the United States and other English-speaking countries continues to outpace emerging markets. Out of 155 medium-to-large-sized companies identified, 40% are headquartered in the United States. Throw in the United Kingdom and Ireland, and all of the Nimdzi Top 10 companies are from English-speaking countries.

MARKET ANALYSIS

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Figure 4: Distribution of large LSPs globally.

MARKET ANALYSIS

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Figure 3: 39% of LSPs in the Nimdzi 100 are headquartered in the United States.

Top European regions

German-speaking (ie: DACH) countries (Germany, Austria, Switzerland) are home to 14 LSPs in the Nimdzi 100.

Nordics (Sweden, Norway, Finland) are home to 12 LSPs in the Nimdzi 100. French-speaking (France, Luxembourg, Belgium) are home to 10 LSPs in the Nimdzi 100.

Large LSPs appear around enterprise exporters with complex technical products. They grow mostly in mature markets with high per capita income and high cost of translations. Selling at USD 0.21 per word in the United States, a company can reach USD 10 million with 47 million translated words. At USD 0.02 per word in India, it will take ten times as much in volume.

Thus, while the economies of India and Brazil are very large, and by GDP they both beat Sweden by a factor of four or five, Sweden has produced seven large LSPs and there are hardly any in either Brazil or India.

CONCLUSION

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The Nimdzi 100 indicates that the language services market exceeds previous estimates. The industry is extremely fragmented and incorporates multiple niche segments. These niches grow at different speeds.

Some, like document translation, are fairly stable and grow at a slower rate. The best way to scale quickly in these segments is via acquisitions. Regulated segments such as life sciences and financial services continue to show strong growth. These continue to be safe bets for LSPs looking to grow organically. Other areas like media localization and gaming have recently boomed. Explosive growth in these exciting industries provides ample opportunities for ambitious LSPs that know how to scale.

It is also clear that mergers and acquisitions will continue to play an influential role in our industry. M&A activity is showing no signs of slowing down, so we can all expect to see more consolidation on this front going into 2018 and beyond.

Many LSPs are entering 2018 on winning streaks. The industry is growing, and large LSPs are enjoying the ride. As the saying goes, a raising tide lifts all ships. Despite the looming threat of machine translation, the demand for human language services is larger than ever. The outlook is good. If you need additional confirmation, we encourage you to reach out to any of the companies who earned a spot on the 2018 Nimdzi 100. They will certainly confirm.

Based in Seattle, Nimdzi Insights LLC is a full-service analyst and consulting firm focused on the language, translation and localization industries. For more information, visit: www.nimdzi.com.