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    previousDeutsche Telekom’s Evernote Deal Points the Way for Telcos Tech Europe nextWhat Does $30 Million Buy You?
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      • March 26, 2013, 2:10 PM GMT

      E-Learning App Babbel Closes $10 Million Series B Round

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      • By Anna Leach

      Babbel Inc
      Angela Merkel tries out Polish on the Babbel app, at an awards ceremony in March 2013.

      Online language-learning service Babbel has just closed a $10 million Series B funding round, the company announced Tuesday.

      The Berlin-based education startup targets language learners with gaming techniques and has thrived in the Germany where there is a high demand for language education. Babbel has 15 million users, including German Chancellor Angela Merkel who gave the Polish lessons a spin on a Windows 8 tablet at an awards ceremony in March. (Apparently she had trouble with “cześć” the word for “hello”.)

      The new cash will be funneled into international expansion in the Americas and other European countries, said CEO Markus Witte. It will also go towards rolling out full-featured products on other platforms including iPhone and Android, which currently only have vocabulary tools.

      Mr. Witte said brand recognition for Babbel in Germany is high and he hopes to replicate that in other markets. “We have to do two things,” he said. “We have to grab market share from what is already there and we have to develop the latent markets.”

      Geared at undercutting more expensive traditional language programs, Babbel also harnesses game techniques to online learning. A six month subscription to one of Babbel’s full language courses costs $44.70 and is currently available on web and iPad.

      Babbel last week acquired a San Francisco-based language learning competitor PlaySay, but Mr. Witte says that the company plans to fuel its own expansion rather than acquire other companies. “I don’t think that we will acquire a lot of companies, so we will do the marketing drive ourselves.”

      Babbel will continue to iterate the product using the gaming techniques which underlie the app. “We will continue to look at the learning process. We do that in a similar way to gaming companies, we look at the data on how users behave, we’re very data driven,” he said.

      Mr. Witte said that he planned to increase staff from 70 to approximately 100, with majority of the new hires working on international markets.

      Leading the $10 million funding round announced Tuesday is Reed Elsevier Ventures. Other investors include Nokia Growth Partners as well as existing investors, IBB Beteiligungsgesellschaft via its VC Fonds Technologie Berlin, and Kizoo. Babbel, founded in 2008, previously picked up $2.2 million in equity and debt, including a low-interest loan from the European Commission distributed via a German bank. The startup is now cashflow postive, and has experienced revenue growth of over 200% in the past year.


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