Berlin-based language learning service Babbel was due to go public on the Frankfurt Stock Exchange in late September. But just days before the initial listing, the company ended the Evergrande debt crisis, which made global equity markets very nervous. He hasn’t announced a new date yet, but as Arne Schepker, CEO of Babbel told me, the company continues to monitor the markets.
The deletion of the IPO was clearly unexpected for everyone, however. “It was disappointing for the team who worked on it – worked hard and long – and we were doing really well,” said Schepker. “We had our books covered, we were on the right track, met over 100 super interesting investors, received fantastic feedback – then Evergrande’s situation ended, which ended most markets IPO. We were faced with a very conscious decision to go into this market, yes or no? “
Schepker is confident the company made the right decision, which the team was able to do as Babbel is well funded and has plenty of cash in the bank, along with other funding options to keep investing in its products and make acquisitions as opportunities present themselves.
Image credits: Hubbub
One of the fastest growing activities of the company is its live courses, which complement the service’s application-based language learning tools. Launched earlier this year, Babbel Live saw a 300% increase in subscriptions and a 400% increase in revenue in the second half of 2021 compared to the first half. With tens of thousands of learners, Babbel Live now hosts 15,000 courses each month and Schepker tells me that for about 25% of those learners, the live platform is the first point of contact for those users, while 75% are launch in the application.
Babbel Live and the company’s Babbel for Business B2B services now represent 9% of the company’s revenue. And business overall is doing well too, with billable sales in November exceeding $ 20 million, up 30% from 2020.
It helps, Schepker noted, that the company is able to recruit some of the best teachers, thanks to its reputation as a high-quality product. “We are pushing the boundaries of innovation and we have always tried to make the most of human intelligence and artificial intelligence. So we’re not entirely human or entirely technological and I think that’s what makes us very attractive to live tutoring teachers. ” he said.
Image credits: Hubbub
On the B2B side of the business, Babbel recruited 5,000 new corporate learners in November and the company now works with more than 1,000 companies. It took a while for Babbel to develop this business, which was only available in Germany for a long time and recently expanded to Italy. The plan is to expand it soon to other European markets and then to the United States as well. Schepker noted that corporate language learning accounts for around a third of the overall language learning market, which therefore represents a growth opportunity for the company.
Going forward, the Babbel team is specifically looking to create more integrations between its different platforms, so that a teacher on Babbel Live can see what a student has learned in the app between lessons, for example. Add to that the podcasts, built-in games and other touch points from Babbel and Babbel already offers a fairly rich ecosystem of language learning tools. The question now is how it can bring all of these elements together into a more cohesive platform.
“Users tend to put together their own ecosystem of learning methods, but I call it creative chaos because we’ve never really learned how to do it – and it’s not integrated,” Schepker said. “So the different learning methods don’t have the benefit of knowing what Arne just did on his app when Arne walks into a classroom. This is the added value that we see in the ecosystem, both for the learner and for the teachers and for us as a language learning company: to make sure that we can actually move you forward in your learning journey, because we assemble your ecosystem for you. “