Language Learning Investment and Impact Landscape

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Language Learning:

Language learning has huge potential in emerging markets like India, China, South-east Asia, Africa, etc, where aspiration and need to learn English is very high as it is directly liked to the employment opportunities, pay scale and quality of life. Language fluency encompasses four key skills– reading, writing, speaking and listening– and technology facilitates all of these areas.

Positive Trends:

  • Driven primarily by English language learning in India and China.
  • The overall language learning market in India and China is expected to continue growing as players come up with newer, differentiated alternatives.
  • The language learning market is highly fragmented, with high potential for newer niche players in the market
  • The market is highly B2C dominated, with some cases of C2C presence 

Negative Trends :

  • Adoption in the online language learning space is primarily driven by English learners, who demonstrate a high level of seriousness towards learning, by taking evaluation tests and paying for the provided content.
  • Monetization through paid subscriptions in the online language learning space is anticipated to remain low, with ad-based revenues forming the major share of revenues.
  • High availability of free content on streaming sites and other mediums, results in a large portion of the non-serious learners in the user base moving to these platforms, resulting in loss of ad revenue from these customers.
  • In the language segment, adoption seems skewed towards basic conversational skills, in comparison to structured learning courses.
  • So many companies in this space have shut down the shop
  • This segment is already cluttered with companies

Investment Landscape :

  • Kings Learning, raised 2.5 million USD
  • Culture Alley, raised 7 million USD in total
  • Duolingo, raised 108 million USD in total
  • Babbel, raised 33 million USD
  • Rosetta Stone, public company
  • Busuu, raised 17 million USD
  • Memrise, raised 21.8 million USD
  • DadaABC, raised 100 million USD
  • Unbabel (raised 31 million USD from Google and YC) – translation as a service

Recommendation

  • Deep tech companies using AI, speech to text, text to speech, ML, etc and translation as a service company in this space will be interesting to look at.
  • Impact : 4 out of 5 in terms of reach to low income or mid-low-income households
  • Returns: 3 out of 5

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