Despite a scrapped IPO, Babbel is seeing rapid growth for its language learning service - TechCrunch

Despite a scrapped IPO Babbel is seeing rapid growth for

Berlin-based language learning service Babbel was due an IPO on the Frankfurt stock exchange at the end of September. But just days before the initial listing the company pulled the plug in anticipation of the growing Evergrande debt crisis that made global stock markets very nervous. A new date has not yet been announced, but as Babbel CEO Arne Schepker has told me, the company is monitoring the markets.

But it was clear that not everyone was expecting to write the IPO. "It was a disappointment for the team that worked on it - working hard and long - and we were doing very well," Schepker said. “Our books were covered, we were on the right track, we met over 100 very interesting investors, we received fantastic feedback - and then the Evergrande situation emerged, which pulled the plug on the most IPO markets. We had a very sensible decision ahead of us whether or not to launch ourselves into that market? ”

Schepker is confident that the company made the right decision, something the team was able to do because Babbel is well funded and has enough money in the bank, as well as financing options others to continue to invest in their products and gain ownership as opportunities arise.

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One of the fastest growing businesses in the company is its live classes, which complement app - based language learning tools. Launched earlier this year, Babbel Live saw a 300% increase in memberships and a 400% increase in revenue in the second half of 2022 compared to the first half. With tens of thousands of learners, Babbel Live now runs 15,000 classes per month and Schepker tells me that for about 25% of those learners, the live platform is first point of contact for those users, while 75% start with the app.

Babbel Live and the company's B2B Babbel for Business services now make up 9% of the company's revenue. And business as a whole is looking good, too, with billable sales in November exceeding $ 20 million, up 30% from 2022.

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It helps, Schepker noted, that the company is able to hire some of the best teachers, thanks to its reputation for high quality production. “We push the boundaries of innovation and we have always tried to make the most of human and artificial intelligence. So we are not completely human or full of technology and I think that's what makes us very attractive for live tutor teachers, ”he said.

1640251711 514 Despite a scrapped IPO Babbel is seeing rapid growth for

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On the B2B side of the company, Babbel signed 5,000 new corporate learners in November and the company now works with more than 1,000 companies. It took Babbel a while to build this business, which was only available in Germany for a long time and had only recently been extended to Italy. The plan is to expand soon to other European markets and then the US, too. Schepker noted that physical language learning accounts for about a third of the total language learning market, so this represents a growth opportunity for the company.

Looking ahead, the Babbel team is particularly looking at how they can create more integration between its various platforms, so that a teacher can see on Babbel Live what a student has learned in the app between classes, for example . Add to that Babbel's podcasts, in - app games and other hotspots and Babbel already offers a very rich ecosystem of language learning tools. The question now is how he can bring all of these into a more coherent platform.

“Users tend to sew their own ecosystem of learning methods, but I call that creative chaos because we've never learned how to do that - and it's not it is united, ”Schepker said. “So the different ways of learning do not benefit from knowing what Arne has done on his app as Arne walks into the classroom. That 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 ensure that we can get further on your learning journey because we sew your ecosystem for you. "

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