Money talks: Language-learning startup Babbel acquires & shutters PlaySay as it eyes US and mobile growth

Money talks: Language-learning startup Babbel acquires & shutters PlaySay as it eyes US and mobile ...

In a move to grow its presence in the global mobile education space, Germany-based language-learning startup Babbel has acquired San Francisco-based social language-learning iOS app PlaySay.

As part of the deal, PlaySay will also be pulled from the App Store 45 days from today and it won’t be incorporated into Babbel, with users being directed to Babbel’s website.

Founded in August 2007, the company behind Babbel, Lesson Nine GmbH, operates from Berlin and now has around 170 full-time and freelance employees. Since July 2008, Babbel has been funded by Kizoo AG and VC-Fonds Berlin, before going on to raise around €1M with the aid of European Funds for Regional Development (EFRE) and the State of Berlin. It also previously acquired FriendsAbroad back in 2008.

Babbel operates an online and App-based language learning system covering Spanish, English, French, German, Italian, Portuguese, Swedish, Turkish, Indonesian, Polish, Norwegian, Danish and Dutch. Through its website, Babbel offers online courses, in addition to its vocabulary-trainers for iOS, Android, Windows 8 (see previous coverage), Windows Phone and Kindle Fire. The company claims more than 15 million users in 190 countries.

PlaySay launched in San Francisco in September 2011 (though was originally founded in 2008), offering an iOS game designed to connect Spanish and English-learners around real conversations. PlaySay has been backed by a number of VCs in the education space, including Novak Biddle Venture Partners. And at launch more than 1.5 years ago, it announced premium content deals with Mcgraw-Hill, a major publisher of language books, and HarperCollins.

Euro>US acquisition

As part of the acquisition, PlaySay founder and CEO Ryan Meinzer will join Babbel as a strategic advisor for its US operations, though he will also be joining the team at Heroku, which is owned by Salesforce.

PlaySay users are being “invited” to join the Babbel community, and the Berlin company is clearly aiming to grow its presence in the US and further afield.

“Education is going mobile,” says Markus Witte, CEO of Babbel. “This acquisition represents a continuation of our strategy to offer a complete range of mobile solutions to language learning and the possibility to leverage market share in the US.”

Meinzer, meanwhile, also has eyes for a much bigger crown in the language-learning space – Rosetta Stone.

“With an affordable price point and focus on mobile, is poised to usurp giants like Rosetta Stone who have neglected the majority of the users in the USA market that spend up to $100 each year on self-study language learning products,” he says. “The winner of the race in language-learning software will be the one that does mobile the best and will be well positioned in the principle USA market armed with the acquisition of PlaySay.”

It’s an interesting move for sure, chiefly because this is a European company acquiring a US startup, which is a rare occurrence. But also because PlaySay is being pulled from the App Store, so it will be interesting to see how this news goes down among its existing user-base.

Feature Image Credit – Thinkstock

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