Unbabel sold for $5.7 million after $250 million talks

Portuguese AI translation startup Unbabel sold all its assets to US rival TransPerfect for $5.7 million in August 2025, after merger talks earlier that year had initially valued the company at about $250 million. The gap shows how quickly one of Portugal’s best-known startups lost value before entering insolvency proceedings.

According to court documents reviewed by ECO, Unbabel entered exclusive talks in January 2025 with a company identified in the case as Mayfair for a merger that initially implied a valuation of around $250 million. That figure was later cut to $60 million during due diligence, after Mayfair identified what the documents describe as a serious liquidity problem, with cash only to keep the company operating until August.

Unbabel’s insolvency filing said the company had “only enough liquidity for two weeks” when the asset sale was agreed. The filing also said TransPerfect’s bid was the highest of three offers received after about 20 approaches to potential buyers by management and senior creditor Wuessen Lending. Vasco Pedro, Unbabel’s co-founder, told ECO the $5.7 million sale proceeds were paid directly to Wuessen as partial repayment of debt that exceeded the sale price.

The startup now faces creditor claims of €28.6 million, of which €15.4 million have already been recognized, according to the case file. Iberis is claiming €11.56 million under a bond loan, while Buenavista Equity Partners has sought €13.18 million plus interest and has separately challenged the asset sale in court.

The insolvency administrator, Pedro Pidwell, said in his report that he could not confirm with certainty that Unbabel itself received the share due to it from the asset sale, and that the transaction worsened the debtor’s position. A Portuguese court will now decide whether the insolvency was wrongful or fortuitous, after a request by Iberis to open that procedure was accepted.

Originally published at Eco.pt