Language app Babbel translates European success to US market


  • TECH
  • Tuesday, 20 Feb 2018

Markus Witte, co-founder and CEO of the Berlin-based language learning app company Babbel, poses in this undated handout picture received in Berlin, Germany February 20, 2018. Marc Beckmann/Babbel/handout via REUTERS

BERLIN: It might seem a tall order to persuade people to spend as much to learn a language on their smartphone as it costs to subscribe to a music streaming or video-on-demand service.

But Berlin-based startup Babbel says that, after 10 years in business, it has finally cracked the US market, where sales more than doubled last year and are on track soon to eclipse its home market in central Europe.

Babbel, the top-grossing language app worldwide, charges US$8.95 (RM35) a month for its most popular three-month deal that features interactive drills and conversational practice using speech recognition.

Its subscription business contrasts with that of US-based rival Duolingo's free, ad-supported model.

"Around June we noticed there's a flywheel going," co-founder and CEO Markus Witte said of the US market in a recent interview. "We know that this market is big enough for us to grow there for a quite a while."

Key was the hiring a year ago of Julie Hansen, previously of Business Insider, to lead the US sales drive.

Babbel said its US sales rose by 140% in the second half of 2017. It counted 70,000 new paying users in the United States in January, up from 40,000 last August.

New US sales overtook central Europe in December and it will become Babbel's biggest market soon, says the company, which does not disclose revenue figures for competitive reasons.

The biggest challenge for language apps is to encourage users not to give up – and to convince learners that Babbel is different from other providers, said Witte.

"There have been more or less successful language-learning companies in the US before," he told Reuters, "but nobody was really invested in the actual learning part; they usually invested way more in how do we sell and market it."

Babbel says its average user stays the course for over 12 months. Of those who have tried to learn elsewhere, 87% say they are having more success with Babbel, its own customer research shows.

Worldwide, Duolingo had nearly three times the number of unique visitors – around 20.3 million – compared with Babbel’s 7.83 million over the last three months, according to data from browser and smartphone audience measurement firm SimilarWeb.

In the US market, Silicon Valley based-Duolingo had nearly 10 times as many users as Babbel, while the two language apps are more closely matched in Germany, Babbel's home market, and other European countries, SimilarWeb data showed.

The company, which has raised US$33mil (RM128.75mil) from investors in three funding rounds, says it is cash-flow positive, doesn't need fresh funding to accelerate growth, and might consider "adjacent" acquisitions.

"Our focus is on healthy unit economics," said Witte.

"We can't acquire customers for more money than makes sense. We never did that and will never do that." — Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
   

Next In Tech News

Bitcoin rises 5.6% to $49,337.72
Tesla crash victim lauded 'full self-driving' in videos on Tiktok
Fifteen apps parents should be aware of: Are any of these on your child’s phone?
My dad wants to invest in Bitcoin. Should he?
Army of fake fans boosts China’s messaging on Twitter
US Feds say a lack of reporting poses barrier to cyber defence
As of iOS 14.4, Apple lets you get more volume out of your iPhone
Need a professional photo? In pandemic times, you can do it yourself
Biden revokes Trump order that sought to limit social media firms' protections
Stock photography: Tips for turning your photos into cash

Stories You'll Enjoy


Vouchers