HALIFAX, N.S.; Diaphonics Inc., a developer of speech recognition and voice security technologies for enterprise and telecom markets, today announced the completion of a $1-million round of financing. Participating investors are BDC Venture Capital, a division of the Business Development Bank of Canada, and Nova Scotia Business Inc.
Diaphonics will use the new capital to expand product development and sales efforts. Company management will immediately embark on efforts to raise a second round of approximately $10 million, with an anticipated closing in the third quarter of 2002.
"The enthusiastic reception for our technologies with both customers and investors bodes well for the future of Diaphonics," said James Craig, President and CEO of Diaphonics. "We see this investment as a positive first step and anticipate completing a second venture round in the coming months."
Diaphonics develops voice-interactive software and systems that help companies automate and improve the way they interact with customers, suppliers and employees over the telephone. The company's PowerTalk Platform delivers automated speech recognition and biometric security, resulting in demonstrable cost savings and improved customer service. Diaphonics' patent-pending Voice Security Token creates a secure digital receipt of a voice transaction, based on the biometrics of the speakers. With Diaphonics' technologies, callers can now conduct secure, automated transactions over any phone by giving simple, natural voice commands.
"Diaphonics is rapidly gaining a reputation as a pioneer in the voice biometrics and voice application domain; a sector poised for exponential growth," said Gregory Phipps, a Director of Venture Capital with BDC. "The company has attracted a solid management team and continues to define intellectual property that will provide it with a sustainable competitive advantage in the voice space. We anticipate strong interest from venture capitalists going forward and envisage continued support of the company through additional investment and a proactive role on its board."
President and CEO Stephen Lund of Nova Scotia Business Inc. said investing in Diaphonics is a perfect example of the new organization's role in facilitating business expansion in a strategic growth sector. "Information technology is one of the key areas we have identified for growth opportunities," said Lund. "Diaphonics is a company at the forefront of exciting technological advances, and with a strong business case. Our investment allows it to complete a necessary financing phase and move to the next level in its expansion plans."
The market for speech technologies is expected to grow rapidly. According to Kelsey Group, a research organization that focuses on the speech technology industry, the global market for speech technologies is expected to be worth $40 billion by 2005.