Language-Learning Startup Babbel Raises $22 Million


Babbel, a language-learning startup out of Germany, has raised $22 million during its third investment round to expand its offerings to online learners across the world.

The Series C round was led by Scottish Equity Partners (SEP) and reinstated the support of existing investors such as Nokia Growth Partners, VC Fonds Technologie Berlin and Reed Elsevier. The startup raised $10 million in 2013.

Reporting on how the funds will be utilized, a Babbel spokesperson said:

“The money will help fuel our continued growth worldwide. In terms of product development, it’s important for us to explore new technologies and remain at the cutting edge. Having good content isn’t enough, the important thing is to integrate with day-to-day life and motivate people to continue learning. Our recently released app for Apple Watch is a good example of this: it allowed us to bring together online learning and the physical world in a new and effective way.”

The 2007-launched startup is now among the leaders in online language learning, offering mobile apps and a website that serves 14 languages including French, Spanish, Italian and Russian. Some of its offerings include vocabulary training, listening and writing practice and speech-recognition support for advancing one’s pronunciation.

With over 120,000 daily downloads, the company has launched a version for the Apple Watch – the first language learning app to become available on the device.

Subscription to Babbel’s service is at $13 per month per language and $7 for users with an annual payment structure. According to Thomas Holl, Babbel president, subscribers usually stick with Babbel’s learning tools for more than twelve months.

Language courses are developed by a team of linguists, educators and education experts to enable learners to learn a new language in a motivating and supportive manner.

Its undisturbed profitability since 2011 was one of the factors Series C round investors took very seriously.

Babbel offers more than 6,500 learning hours on thirteen languages through its web and iPad apps along with free vocabulary practice through iPhone, Android and Windows 8 apps. Its target market are adults over 25 who pursue learning that is “motivated by self-enrichment”.

The Berlin-based startup opened its first office in the US in January, and the high-profile SEP investment will make it possible for Babbel “to fully capitalize on a significant market shift towards self-motivated learning,” Thomas Holl, founder and President of Babbel Inc., said, “Babbel is defining a new market and revolutionizing the way people learn languages.”

SEP partner Stuart Paterson described the investment’s appeal:

“Babbel sets the standard for online language learning, and its strong international footprint is a reflection of that. We see significant growth potential in this market and are delighted to support the company as it executes its expansion in the Americas.”