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Kennet Venture Partners portfolio company Fluency, the leading provider of speech recognition applications, acquired SRC Telecom to add hosted speech services to its offering

July 28, 2004,
by volcanic

Fluency Voice Technology Ltd ("Fluency"), the UK-based provider of speech recognition applications has acquired SRC Telecom ("SRC"), the hosted speech application services provider from Voice Recognition Holdings.

In March 2004, Fluency received £6m funding; £3.5m from Kennet and £2.5m from Favonius Ventures, to fuel sales and expand product development in the area of packaged applications for vertical markets. Fluency is now expanding in the US and the funding will further support the development of partnerships and drive growth.

Fluency is a fast-growing business that has rapidly become the UK market leader in speech recognition applications for use in call centres. Speech recognition allows callers to perform simple tasks like ordering a brochure or finding out a bank account balance by speaking naturally via the telephone. Fluency's customers include: Powergen, National Express, Energis, Royal Mail, Barclaycard, Woolwich and JD Williams.

The acquisition of SRC will allow Fluency to offer hosted service provision in addition to in-network and premises-based solutions. It will therefore expand Fluency's market potential as well as encouraging the take-up of speech self-service more broadly.

SRC Telecom is well respected as a leading provider of hosted speech services, with a customer base including the BBC's Freeview and Lloyds TSB. SRC Telecom was a division of Voice Recognition Holdings (VRH), which will continue to own and operate its market leading digital dictation and desktop speech recognition business under the name SRC Dictation Solutions.

David Carratt, Managing Director of Kennet, said: "Fluency's speech applications are already used by many large enterprises in the UK and elsewhere and this acquisition further enhances the Company's offering. Kennet saw the opportunity to be the first institutional investors in a post-spinout company in a fast growing market place."

Alex Green, Fluency's CEO, commented: "The acquisition of SRC Telecom further strengthens Fluency's UK leadership in speech recognition solutions. It allows us to offer hosted speech recognition solutions, via an existing proven facility, to those customers who prefer this means of delivery. The SRC Telecoms business has excellent people, who will add to Fluency's unique skill base in the design and building of speech applications."

Chris Hart, CEO of Voice Recognition Holdings said: "This transaction gives SRC Telecom customers access to an even wider range of high quality telephony speech solutions, as well as being good for VRH's shareholders. The sale of the Telecom business will allow VRH to focus greater resources on further developing our fast growing dictation solutions business."

Kennet Venture Partners Limited

Kennet Venture Partners is a leading transatlantic venture capital firm which invests in growth companies providing information technology products and business services that leverage information technology. Kennet provides expansion capital to firms who want to accelerate growth and build exceptional shareholder value in partnership with an experienced investor. Kennet Venture Partners acts as an advisor to Kennet I LP, a Jersey limited partnership and to Kennet II LP, a Guernsey limited partnership. Kennet Venture Partners is authorised and regulated by the Financial Services Authority.

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Fluency Voice Technology Ltd

Fluency Voice Technology is a global provider of speech recognition applications. The company's solutions enable large enterprises to significantly reduce costs and enhance customer service.
Fluency provides sector specific applications that allow the automation of high volume contact centre activities. Key sectors for which Fluency has deployed applications include Retail Banking, Travel & Transport, Utilities, Retail & Distribution and Telecoms. Fluency has offices in the UK, US and India.

Fluency is privately owned and backed by two major European technology venture capital firms, Kennet Venture Partners Ltd and Favonius Ventures.

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