Language learning service situated in Berlin Babbel planned to go public in late September on the Frankfurt Stock Exchange. However, only days before the initial public offering, the business pulled the plug due to the looming Evergrande financial crisis, which sent global stock markets into a tailspin. Although no new date has been announced, Babbel CEO Arne Schepker assured me that the business is still keeping an eye on the markets. The cancellation of the IPO, on the other hand, came as a complete surprise to everyone. “It was disheartening for the crew who worked on it – we were doing pretty well,” Schepker added.
“We had our books in order, we were on the right track, we met over 100 super-interested investors, and we were getting great feedback — and then the Evergrande problem came to a head, effectively shutting down most of the IPO markets.” We had to make a conscious decision about whether we should enter that market or not.” Babbel is well funded and has enough of cash in the bank, as well as other financing alternatives to continue to invest in its products and make acquisitions when opportunities emerge, according to Schepker.
Live lessons, supplement the service’s app-based language learning tools, are one of the company’s fastest-growing businesses. Babbel Live, which launched earlier this year, witnessed a 300 percent spike in subscriptions and a 400 percent increase in income in the second half of 2021 when compared to the first.
Babbel Live now conducts 15,000 lessons each month for tens of thousands of learners, and Schepker tells me that the live platform is the first point of contact for roughly 25% of these users, while the app is used by the other 75%. Babbel Live and Babbel for Business, the company’s B2B services, currently account for 9% of the company’s revenue. Overall, the firm is doing well, with billable sales exceeding $20 million in November, up 30% from 2020.
It also helps, according to Schepker, that the firm is able to hire some of the top teachers because of its high-quality product. “We constantly attempted to make the best of human intelligence and artificial intelligence as we pushed the boundaries of innovation.”
So we’re neither entirely human nor fully technological, and I believe that’s what makes us so appealing to classroom teachers who need live tutoring,” he explained. In November, Babbel signed up 5,000 new corporate learners, bringing the total number of firms it works with to over 1,000. Babbel took a long time to build up this business, which was previously exclusively accessible in Germany and has just lately extended to Italy.
The idea is to spread it to additional European markets soon, followed by the United States. According to Schepker, corporate language learning accounts for around a third of the entire language learning industry, so the firm has a lot of room to develop. Looking ahead, the Babbel team is considering how it may improve synergies across its various platforms, such as allowing a Babbel Live teacher to view what a student has learned via the app between courses.
Babbel currently has a diverse ecosystem of language learning resources, including podcasts, in-app games, and other touchpoints. The question now is how it will integrate all of these into a single platform. “Users prefer to piece together their own ecosystem of learning approaches,” Schepker explained, “but I call it creative chaos because we never really taught how to do that — and it’s not integrated.”
“As Arne enters into a classroom, the different learning techniques don’t receive the advantage of knowing what Arne has just done on his app.” That is the extra value we see in the ecosystem, for both learners and teachers, as well as for us as a language learning company: ensuring that we can really bring you farther in your learning journey because we stitch together your environment for you.
