Microsoft acquires Nuance

Nuance AI solutions

Microsoft acquires Nuance

Deal Financials

  • Transaction Value: $19.7B
  • Enterprise Value / Revenue: 13.3x
  • Enterprise Value/EBITDA: 71.4x

Transaction Overview

  • On April 12, 2021, Microsoft announced its acquisition of Nuance Communication, a speech-to-text recognition software provider which uses artificial intelligence.
  • Through this acquisition Microsoft can enhance its industry-focused cloud strategy, adding new AI capabilities across healthcare and other industries.

TBP’s analysis on Conversational AI in Healthcare

  • The COVID-19 pandemic is driving the need for Conversational AI in the healthcare industry.
  • Based on the 2020 CDC report regarding trends in the use of telehealth, the demand for frictionless patient experience in telehealth increased by 154%. With better customer/patient services at the forefront, tools that are powered by AI and NLP are in high demand.
  • To better serve patients, leading companies started to provide various AI-based customer engagement solutions to enhance a smoother patient experience.
  • AI is used to overcome challenges like patient engagement and information retrieval, doctor appointments, and follow-ups to streamline the overall patient experience during their healthcare visits.

TBP’s summary on transactions in Conversational AI in Q1 2021

  • In Feb 2021, Twilio acquired Value First Digital Media, an AI-powered communication platform provider which helps businesses seamlessly engage with their customer.
  • In Jan 2021, Visiqua acquired ROIVerify, a company providing conversational AI solutions to increase customer engagements and drive more sales for businesses.
  • In Jan 2021, Genesis research acquired EvidScience, a leading AI technology platform in the life science and healthcare industry. With this acquisition, Genesis Research will have a unique combination of AI + Human Intelligence to extract insights at greater speed with better quality.
  • Various early-stage investment companies have shown active interest in this space. In Jan 2021, Five Elms Capital invested in PlayVox, a company providing AI-powered quality assurance software helping call center agents in delivering a better customer experience.
  • In Jan 2021, Stout Street Capital invested in, an AI-powered conversational marketing platform that enables meaningful and intelligent conversations between businesses and their customers.

TBP’s co-investments in the AI space

  • TBP was part of a group of seed-stage co-investors in, which develops AI-powered software for customer interaction analysis and streamlining quality assurance workflows.
  • TBP also participated in the seed round of, a next-generation Natural Language Processing (NLP) technology platform that automates technically complex customer support tickets.

M&A Transactions in Conversational AI

This table shows M&A Transactions in Conversational AI

Investment Activity in Conversational AI

Table showes Investment Activity in Conversational AI

About True Blue Partners
True Blue Partners is a boutique M&A advisory firm that serves lower mid-market enterprise software, service and solutions companies. It brings the rigorous strategic and financial perspective of bulge bracket firms with a company building approach and a steadfast partnership that only an independent boutique firm can deliver. For more information please visit or email us at

TBP was NOT and advisor to this transaction.