Online Latin American School ‘Open English’ Raises $120 Million

Open English, an online language startup company targeting Latin Americans wishing to improve their English skills, has raised $120 million.

“We wanted to create something that was monthly and cheap and allowed you to get started,” Andres Moreno, Open English co-founder and chief executive, told WSJ at the offices of Technology Crossover Ventures, a venture-capital firm that invests in the school. “That has been the niche Open English has filled.

Moreno started the company in Caracas, Venezuela, in 2008 after leaving college.  According to the company’s website, his vision was to reinvent how people learn English.  He hired native English speakers to live and teach in Venezuela, tutoring employees working in Caracas.  However, navigating the city’s traffic was difficult for the tutors, and the country’s high crime rate and political unrest were causing them to leave.

“I used Skype, and it dawned on me that there had to be a way to apply that technology to enhance human interaction over the Web,” said Moreno.

The company grew over the next two years, beginning with an investment capital of $2,000, reaching in its last round a total of $120 million.

Open English currently enrolls 100,000 students and is worth $350 million.  Users pay $80 per month for 24/7 access to live lectures taught by native English speakers and small group classes, writes Sharon Harding for The Latin Post.

“The on-demand nature of it, the ability to get live instruction, is pretty critical,” Jeff Lieberman, managing director at Insight Venture Partners, which invested in Open English, said. “Obviously, Internet access is a requirement, and in Latin America Internet access and infrastructure is rapidly increasing.”

Half of Latin Americans, 300 million people, use the Internet.  According to a study out by comScore Inc., there has been a 17% increase in the number of Latin Americans using the Internet from April 2013 through April of this year.  That is 5 times faster than the same growth in Europe, writes Ezequiel Minaya for The Wall Street Journal.

“You have a growing middle class and a young demographic with a climbing increase in the consumption of technology.” said Cate Ambrose, president of the Latin American Private Equity & Venture Capital Association.

The company uses creative commercials starring Moreno that poke fun at mispronunciation of English words.  In one, a man follows a woman on the beach, repeating “Persueychon.”  She finally corrects him, “Did you mean, Persuasion?”

Opponents to online schooling say there has been a shift from teaching grammar to simply providing students with the ability to get their ideas out there.

“The notion of online learning is not unheard of and can help people learn,” Naomi Baron, a linguistics professor at American University in Washington, said. “But just hearing a native speaker all the time guarantees nothing.”

Moreno replies to these challengers by accentuating the users’ access to live teachers who are native English-speakers, and a “learning platform” that promotes human interaction and gives students “a well-balanced study plan, including reading and writing.”

Camila Souza for Tech Cocktail reports that Moreno is starting plans to open an online Next University, which would provide online college courses for Latin America.  The project is expected to be available to the public within nine months.