Babbel Closes $10 Million Series B Funding Round

• Language learning startup aims for international expansion

• Reed Elsevier Ventures leads a syndicate of Nokia Growth Partners, VC Fonds Technologie Berlin and Kizoo Technology Capital

• Product development focuses on learner engagement and multi-platform use

Berlin, 26 March, 2013 – Babbel, the online learning system for foreign languages, today announced the closing of a series B funding round. Leading the round 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 Technology Capital. The investment will be used to accelerate international expansion and improve the adaptation to all relevant mobile and online platforms.

Present in more than 190 countries, the Berlin-based startup’s strongest footprint to date has so far been in the German market. Now it will aggressively enter other European countries, the Americas and emerging markets. Babbel will also extend its partnerships with different hardware manufacturers, platform providers and media across the world.

Babbel.com is operated by Lesson Nine GmbH, Berlin. The company had previously raised a total of $2.2M in equity and debt and has experienced rapid revenue growth of over 200% per year since 2011. Recently, Lesson Nine announced the acquisition of competitor PlaySay. Unrelated to the new investment, the deal was made with operating cash flow.

The basis for the language learning system’s success is its consistent use of mobile and Internet technologies and the integration of modern, practical learning content that motivates and guides the learner in an entertaining way. Over 6500 tailor-made learning hours for thirteen languages are available to learners online, as an iPad app and as free vocabulary training apps for iPhone, Android and Windows 8. As of today, the apps have been downloaded over 8 million times.

“Babbel is a European digital media success story and I am delighted that we are joining the investor group at this exciting time”, says Tony Askew, General Partner at Reed Elsevier Ventures. “The startup has grown rapidly to over 15 million users and has built a large subscriber base which generates positive cash flow. Babbel’s excellent mobile and online products consistently rate as consumer favorites and Babbel is very well-positioned for explosive growth in the rapidly growing category of mobile and online language learning.”

“Nokia Growth Partners believes that in a converged digital world, every business must be mobile and this principle drives our investments,” adds Walter Masalin, principal at Nokia Growth Partners. “As mobile transforms the way people learn, Babbel’s flexible and efficient solution supporting multiple platforms means it is well positioned to capitalize on this trend.”

“Since our investment in 2008, Lesson Nine was already able to successfully occupy various markets with its innovative products, and has established itself worldwide as a serious player in the realm of mobile language learning“, says Marco Zeller, Managing Director of IBB Beteiligungsgesellschaft mbh. „This funding round, including other international investors, honors the Berlin company’s extremely positive development, and creates a foundation for even more dynamic growth. We are proud to have been on board with this success story since the beginning, and also to provide more capital as part of this round.”

Michael Greve, CEO of Kizoo Technology Ventures says, “since we started working with Babbel five years ago, the product has made an exciting journey from a nice web tool to a modern and fun language learning experience with a huge user base eager to subscribe for the service. I believe the ideal platform for language learning is tablets and we can expect an even more accelerated growth of the beautiful mobile Babbel products in the future.”

“We are happy to have two new high-profile international investors on board. This financing round opens a great number of opportunities without limiting our strategic options. The renewed participation of existing investors IBB Beteiligungsgesellschaft and Kizoo also pleases me. For our great team of seventy people, there’s still much to be done and much to achieve,” says Markus Witte, CEO of Lesson Nine GmbH.

About babbel.com:

Babbel is the new way to learn languages. With the online language learning system, both beginners and continuing learners can study French, Spanish, Italian, Brazilian Portuguese, Swedish, German, Dutch, Indonesian, Polish, Turkish, Norwegian, Danish and English with the help of interactive listening, writing and speaking exercises. The website babbel.com offers numerous online courses. In addition there are apps for iPad, iPhone, iPod, Android and Windows 8 devices, as well as interactive eBooks. More than 15 million people from over 190 countries are already learning a language with Babbel.

Babbel is operated by Lesson Nine GmbH, Berlin. The company was founded in August, 2007, and now has around 170 employees and freelancers. Since March, 2013, Lesson Nine has been involved with Reed Elsevier Ventures, Nokia Growth Partners, Kizoo AG and VC-Fonds Berlin. Further information at: http://www.babbel.com

About Reed Elsevier Ventures

Founded in 2000, Reed Elsevier Ventures is a venture capital firm based in London and San Francisco and backed by one of the world’s most successful media and information companies, Reed Elsevier. Reed Elsevier Ventures invests in talented and ambitious entrepreneurs and management teams who have the drive to build large, scalable businesses and the determination to become industry leaders. Reed Elsevier Ventures focus on high growth, internet, media and technology businesses based in the US, Europe or Israel in sectors such as big data and analytics, mobile, new media, healthcare information and groundbreaking analytic technologies. Example portfolio companies include Palantir, one of Silicon Valley’s most valuable technology companies, and Babylon, the world’s most downloaded language translation tool.

About Nokia Growth Partners:

Nokia Growth Partners invests in companies that are changing the face of mobility, communications and the internet. NGP offers industry expertise, capital and an extensive network, enabling entrepreneurs to build disruptive, industry-changing companies and take them to the global market. With offices in the US, Europe, India and China, NGP extends the reach of companies making their products and services local everywhere. Visit http://www.nokiagrowthpartners.com/ for more information.