The global language learning market represents $46.5B USD (2018) and is expected to reach $56B by 2021 according to Statista. In Europe, like in most of the world, English is the predominant foreign language of choice and advanced English language skill is correlated with salaries that are 30-50% higher. This is clearly a sector with a lot of activity and real benefits for learners, and it’s no wonder that some of the most well funded companies in edtech are in this space including VIPKid ($820M raised), Duolingo ($108M) and Babbel ($34M). After diving into the language learning vertical, we created a landscape listing 45+ companies to help ourselves navigate the space. This is by no means an exhaustive list, but it gives a general picture of the market (if you see some players missing, please let us know) and it represents a total 1.3Bn USD of VC/PE investment, according to Crunchbase.
We organised the matrix by the following dimensions:
Human interaction - Group and private face-to-face and/or online meetings
AI - Technology used to deliver the courses (i.e. adaptive learning, platform, VR/AR)
B2C - Individual users
B2B - This includes both educational institutions and corporates
General trends
A wave of companies like Duolingo, Babbel and Busuu launched 8-10 years ago and successfully built companies that capitalized on the transition from installed software (think CD-ROMs) to web-based and later mobile solutions for millions of users. Yet, the language learning market is huge and most of it still happens in traditional classrooms, leaving room for new entrants in both the B2C and B2B sectors. After reviewing 40+ solutions, we are seeing three axes that new players are using to differentiate themselves:
#1 Marketplace - Some companies such as italki, Tolktoo and Fluentify use their platforms to smartly match learners with tutors and/or peers for online one-on-one or group sessions. They usually leverage traditional marketplace revenue models such as commission, subscription/membership and listing fees. The success of these solutions relies heavily on a human component and on achieving sufficient scale to derive network effects.
#2 AI focus - We find companies like Lingvist, Slang, Languages.ai and PlusOne that employ machine learning to enable personalised/gamified learning and content recommendations according to users’ language level. One of the promised benefits of AI is to shorten the time it takes to learn a new language. In this configuration, often users do not engage directly with another human being but instead they engage with a machine through daily lessons.
#3 Industry & career oriented solutions - Companies like lingo live, Twenix and Voxy combine two different elements to make their offerings stand out: English learning module & career-aligned content. This 2 for 1 offering does not only allow users to improve their language level but it also allows them to develop their soft skills (e.g. communication) at the same time thanks to industry specific qualified coaches and/or courses.
Our view
Learning, even in ideal circumstances, takes time. Accordingly, we believe that enhancing learning requires understanding and amplifying the latent motivations of learners to persist. Because learning a language serves primarily to communicate with other people, we are particularly interested in language tools that enhance human to human teaching.
On one hand, we believe that human interaction is critical for learners to improve their language fluency and their confidence skills. Learners need to be emotionally and socially engaged to learn efficiently, remove barriers and stay motivated. On the other hand, peer and tutor marketplace solutions often lack personalised learning supported by technology, meaning that tutors/peers struggle to assess students/peers’ progress in detail and to provide really insightful feedback. Mixing both dimensions could allow solutions to be more effective by tracking students’ progress and pinpointing strategically specific areas of improvement that would otherwise be overlooked by humans.
While significant challenges remain ahead, we applaud and congratulate all the entrepreneurs who are developing impactful solutions that allow people to learn languages better. We’d love to hear from you.
This is our current view on the language learning space and our hope is to receive feedback from you. We are interested in connecting with key players and backing great teams in this EdTech vertical, so please reach out to info@brighteyevc.com!
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A huge thanks to Kevin Chen (Co-founder of italki), Edward Cooke (CEO & Co-founder of Memrise) and Bernhard Niesner (CEO & Co-founder of Busuu) for providing very valuable feedback on this.