Berlin-based language learning service Babbel was supposed to IPO in September. The global stock markets were very nervous when the company pulled the plug a few days before the initial listing. The company has yet to announce a new date, but it is keeping an eye on the markets.
It was surprising that the IPO was scrapped. It was disappointing for the team that worked on it, and they were doing well. We had our books covered, we were on the right trajectory, met more than 100 super- interesting investors, got fantastic feedback, and then the Evergrande situation broke, which pulled the plug on most of the IPO markets. We were faced with a decision of whether to enter that market or not.
The team was able to make the right decision because they had plenty of cash in the bank, as well as other financing options to continue to invest in its products and make acquisitions as opportunities arise.
The image was created by Babbel.
One of the company's fastest-growing businesses is its live classes, which enhance the service's app-based language learning tools. In the second half of the year, Babbel Live saw a 400% increase in revenue compared to the first half. For 25% of learners, the live platform is the first point of contact, while 75% get started with the app, according to the CEO of the company.
9% of the company's revenue comes from the company's B2B Babbel for Business services. Business is looking good, with billable sales in November exceeding $20 million, up 30% from the previous year.
The company's reputation for a high-quality product helps it recruit some of the best teachers. We try to make the best of the human intelligence and the artificial intelligence. We are neither fully human nor fully tech and that makes us very attractive to live tutoring classroom teachers.
The image was created by Babbel.
In November, the company signed up 5,000 new corporate learners and now works with more than 1,000 companies. This business was only available in Germany for a long time and only recently expanded to Italy. The plan is to expand it to other European markets and the US as well. Corporate language learning is a third of the overall language learning market, so this represents a growth opportunity for the company.
The team at Babbel is looking at how it can create more integrations between its different platforms so that a teacher can see what a student has learned in the app between classes. Adding to that, there is a rich array of language learning tools offered by Babbel. The question is how it can bring all of those together.
We never really learned how to do that, so we call it creative chaos. The different learning methods don't get the benefit of knowing what Arne has just done on his app as he walks into a classroom. That is the added value that we see in the ecosystems, both for the learner and for the teachers and for us as a language learning company, to make sure that we can actually get you further in your learning journey.
Live classes, games and more are added to the service.
