Babbel: How Berlin’s language-learning tool made it big

You can learn anything in Berlin, except the German language, Mark Twain once claimed.

A few years ago this might still have been true. But when one language-learning startup was founded in 2008 amidst Berlin’s recovering tech scene, the German capital gave birth to one of the world’s most successful online language-learning tools.

Babbel’s recipe is a mixture of mobile and browser courses with useful language lessons like common idioms, business language and even love-letter writing.

WebMagazin spoke to Alexis Hue, Babbel’s Director of International Growth, recently returning from New York, where Babbel has opened a new office.

WM: Tell us a little bit about Babbel, how does it work?

Alexis Hue: Babbel is a multi-platform learning tool which allows users from all over the world to engage with 13 languages ranging from English to Indonesian. Users get started with a language in beginner and intermediate courses, improving listening, writing and speaking skills as well as expanding their vocabulary.

The courses always teach words contextually, backed up by pictures and audio material so that visual and auditory learning styles are both catered for. A speech recognition tool recognizes and helps to correct the pronunciation of the learner, while the review manager tracks and saves progress and learned vocabulary.

Our product aims to use technology to do what wasn’t possible before: learn a language in an interactive and flexible way at home on the web, but also on the go with our mobile app.

Babbel overview

  • Launched: 2008 (by Lesson Nine GmbH)
  • App downloads: 25 million
  • Employees: 130 employees and 120 freelancers (Lesson Nine GmbH)
  • Languages: English, German, Spanish, Italian, French, Brazilian Portuguese, Turkish, Polish, Indonesian, Dutch, Norwegian, Danish, Swedish
  • Funding: KIZOO AG and VC-Fonds (IBB Bank); $1 million from the European structural funds; $10 million from Reed Elsevier Ventures, Nokia Growth Partners, Kizoo Technology Ventures, VC-Fonds Berlin and VC Fonds Technologie Berlin; total: $12.2 million

WM: What would you say makes Babbel a special startup? How do you stand out in the Berlin tech scene?

AH: I don’t know if we necessarily „stand out“ in the Berlin tech scene. This is also not our goal. We rather aim to stand out as a learning tool, not only in Berlin but in every place where people are interested in learning languages.

If we ever want anything to be special, it’s our product: we want to stand out by developing the best product and content in language learning. With 7,000 hours of courses, I think we are already on the right track.

7,000 hours of language courses in six years

All our courses are developed in-house by a team of didactics and linguistic experts who know how to encourage and incentivize users to continue learning.

The company owns full IP ownership of all content and technology. In other words, we strongly believe that it’s important to keep the matrix in one place to ensure the best development of our product, upon which our international growth depends.

WM: What stage of development are you in at the moment? How are you being funded?

AH: We have been profitable in our core markets since 2011. Since we observed a strong demand for our product worldwide, we raised $10 million in a Series B funding round in March 2013, lead by Reed Elsevier Ventures.

$12.2 million in local, European and international funding

Other investors included Nokia Growth Partners as well as existing investors, IBB Beteiligungsgesellschaft via its VC Fonds Technologie Berlin, and Kizoo Technology Ventures. Babbel has raised a total of $12.2 million to date. We passed the startup experimental phase and we are now in a phase of massive growth with a focus on long-term sustainability.

WM: What’s the financial concept behind Babbel, how do you make money?

AH: Babbel started off as a free app financed by advertising in 2008. In 2009, the company asked its users if they would like to buy a subscription in exchange for the removal of every kind of advertisement and the development of more quality content.

The big majority validated this choice and we switched to a subscription based-model while focusing on the development of our product and content, which is for us the only way to keep our user base satisfied.

Babbel app screenshot© Babbel

WM: How was Babbel created?

AH: Lorenz Heine, one of the founders wanted to learn Spanish. But as he couldn’t find any language learning tool to satisfy his needs, he developed his own vocabulary trainer, trying to make his own learning as easy and motivating as possible.

From a simple vocabulary trainer, the program developed into a complete learning tool and slowly appealed to more and more users. Now we are about 250 employees and freelancers from 26 nations at the headquarters in Berlin and in the New York office, working continually to adapt Babbel to the needs of the users in many different countries.

WM: And finally, why Berlin?

AH: In my opinion, location is not a crucial factor in a successful startup. Europe is very diverse, and different places have their own pros and cons.

What’s essential is for enterprises to exploit the advantages and find a way to offset the disadvantages. As a creative capital, Berlin inevitably draws young talents from all around the world, which is a crucial advantage for an international company like Babbel.

We were able to build up a great international team very fast due to the attractiveness of this city for young international talents. I believe that this multicultural environment is one of Berlin’s great strengths, and creates attractive conditions for international businesses.

SEE ALSO: IBB venture capital in Berlin – an interview with Roger Bendisch

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