Unbabel fails to support Iberis in its restructuring process

Unbabel was negotiating a new round of financing with Iberis Capital, which holds less than 10% of the technology company, but the private equity manager backed out and the operation that would be critical for the ongoing restructuring process failed.

Iberis Capital decided not to move forward with the restructuring process and the transactions provided for in the so-called “Term Sheet”, which was thus terminated.

The deadlines for concluding the final agreements have expired and, furthermore, according to information to which Jornal Económico had access, Iberis claims that it was informed about “unexpected existing liabilities that negatively impact the Group Entities (for example, tax liabilities and existing warrants, among others)”. Both the additional temporal exposure and the liabilities that Iberis says it was unaware of had a significant negative impact on the assessment of the risk/return profile of the Group Entities, Iberis explained to Unbabel, according to a source close to the parties. When contacted, Iberis Capital did not comment. Jornal Económico tried to contact Vasco Pedro, CEO of Unbabel, but without success.

Iberis Capital participated in Unbabel's last financing round that took place in 2023, having raised 19.5 million euros in a financing round that also included the participation of GED Ventures Portugal, Point 72, Notion, ScaleVentures Partners and Caixa Capital.

The Portuguese technology company Unbabel, which operates in the area of ​​automatic translation, is undergoing a restructuring process. As reported by Observador, Unbabel confirmed that “a restructuring process is underway, which aims to adapt the company to market developments”.

The company founded and led by Vasco Pedro moved forward at the beginning of the year with the restructuring process that included the departure of 66 people globally, which is equivalent to around 25% of the total, as reported by the Lusa news agency in February. This is the second restructuring in less than five years.

In 2020, Unbabel had announced the dismissal of 35% of its 250 employees due to the impact of Covid-19, but it reinforced the company's staff again in 2021.

Since then, the company has received European support, through projects included in Portugal 2020 or the Recovery and Resilience Plan (RRP).

In Portugal, 35 workers were affected by the collective dismissal process, with 12 having reached an agreement with the company last month. The remaining 20 people, who appealed to the Directorate-General for Employment and Labour Relations (DGERT) as part of this process, reached an agreement.

Unbabel founder and CEO Vasco Pedro explained to Lusa that “the technology market is changing rapidly”, with an increasing adoption of AI in translation.

“In this regard, Unbabel is currently undergoing a restructuring process, which aims to adapt the company to market developments and prepare it for future investment opportunities in R&D [Research and Development] and growth,” explained the manager.

In addition to Portugal, the technology company is present in the United States, United Kingdom, Romania, Philippines, Germany, Bulgaria and Israel. The online newspaper Página Um had already drawn attention, in 2024, that Unbabel, the 'star' company of the Portuguese 'ChatGPT', has a share capital of just 108 euros, which did not prevent it from raising close to 21 million euros in European funds both through participation in five projects in the Portugal 2020 program and a project included within the scope of the Recovery and Resilience Plan (RRP).

The company planned to found the Center for Responsible AI, a project that began in 2021 and is scheduled to be completed in December 2025, encompassing the creation of the “next generation of AI products”.

The company was even named as one of the main protagonists of the Government's project, 'AMÁLIA', or 'Automatic Multimodal Language Assistant with Artificial Intelligence', an initiative announced within the scope of the 'National Artificial Intelligence Agenda'.

At the time, Vasco Pedro, founder and CEO of Unbabel, reported that the Portuguese company was involved in the project, something that was later denied by the Government.