The Berlin language learning app Babbel goes public. The share placement is expected to bring in around 180 million euros gross and is expected to take place by the end of the year, as Babbel announced on Tuesday. The proceeds are to be used, among other things, to expand the company’s business and accelerate international expansion.
Revenue boost thanks to Corona
With the announcement, Babbel also released some business figures. In the first half of this year, sales rose by 18 percent to 83 million euros. In the Corona year 2020, record revenues of 147 million euros were generated, it was said without a comparison value. More detailed information will soon be available in the prospectus.
The corona pandemic gave business a significant boost, said Babbel boss Arne Schepker. “We have seen a rethink when it comes to digital learning. We no longer have to explain to anyone that learning languages online can also work.” At the same time, it is becoming apparent that there is a lasting change: “We see that digital language learning remains at a high level even in countries that are already further with vaccination and where there are few or no restrictions anymore.”
At the same time, after the pandemic has subsided, Babbel also wants to resume the language travel business that has been put on hold. “The value of the language trip is beyond dispute. It’s about using the language in real life,” said Schepker. Babbel had canceled the bookings during the Corona crisis and paid the customers back the money.
A total of ten million subscriptions
Babbel was founded in 2007 and is mainly financed through subscription revenues. So far over ten million subscriptions have been sold, it is said. The company did not mention the number of active subscriptions on Tuesday either. The USA is now the largest single market for Babbel, emphasized Schepker. The most important target group there are English-speaking users who are learning Spanish.
The Babbel competitor Duolingo went public in the summer. The US rival achieved sales of around 114 million dollars (currently 96 million euros) in the first half of 2021. A clear corona dynamic can be seen here. In the first quarter, sales of a good $ 55 million were almost twice as high as in the first quarter of 2020 with the start of the pandemic. In the second quarter there was an increase of 47 percent to $ 58.8 million. Duolingo’s IPO did not play a role in the timing of Babbel’s placement, Schepker said.