Lingoda Secures $68 Million to Expand Online Language Learning Platform

A Berlin-based startup specializing in online language education has recently announced a new round of funding to fuel its continued growth and expansion. The company has successfully developed a platform centered around live instruction and virtual classroom environments.

Investment Details and Future Plans

Lingoda, which facilitates connections between students seeking to learn English, Spanish, French, or German and native-speaking instructors, has raised $68 million (€57 million). CEO Michael Shangkuan stated that these funds will be allocated to both enhancing the platform’s technological capabilities – including tools for educators and supplementary learning materials – and broadening its reach into new markets, notably the United States.

Currently, Lingoda serves approximately 70,000 students with a team of 1,400 teachers. The platform hosts over 450,000 classes annually, encompassing around 2,000 distinct lessons. Shangkuan reported a tenfold increase in revenue compared to the previous year, alongside a 200% growth in its customer base, now spanning 200 countries.

Vision and Market Opportunity

“Our aim is to make language learning accessible to everyone worldwide,” Shangkuan expressed, outlining the company’s overarching vision.

The funding round was spearheaded by Summit Partners, with participation from existing investor Conny Boersch, the founder of Mountain Partners. The specific valuation of the company has not been publicly disclosed.

Company History and Capital Efficiency

Established in 2013 by brothers Fabian and Felix Wunderlich (currently serving as CFO and Head of Sales, respectively), Lingoda had previously raised around $15 million. This demonstrates the company’s efficient use of capital.

Shangkuan, who hails from New Jersey, emphasized that Lingoda only offers classes that are financially viable. While he refrained from confirming overall profitability, he indicated that the company is not experiencing substantial losses. The global language learning market is estimated at $50 billion, presenting a significant opportunity despite intense competition.

Blending Technology and Human Instruction

Recent advancements in edtech have largely focused on automated tools designed to improve learning outcomes in virtual settings. These innovations prioritize scalability, data analytics, and knowledge acquisition.

However, Lingoda distinguishes itself by integrating these technologies – utilizing Zoom for all classes and exploring analytics to enhance learning – while retaining a core element of traditional education: human instructors. This approach was a deliberate decision, as the startup determined that removing teachers would diminish the value of its offering.

Student Preference for Live Teachers

Shangkuan, a language enthusiast who relocated to Germany to immerse himself in a new culture, highlighted that student feedback overwhelmingly favors live instruction. A remarkable 97% of Lingoda students reported that learning through the platform was more effective than using language learning apps like Duolingo, Memrise, Busuu, Babbel, and Rosetta Stone.

“As an entrepreneur dedicated to delivering a superior product, this feedback is crucial and reinforces our commitment to our original vision,” he stated. “This vision centers on providing high-quality learning experiences facilitated by skilled teachers.” Similar models leveraging live instruction are also seen in companies like VIPKid.

The Importance of Human Interaction in Language Acquisition

There are several reasons why human teaching may be particularly effective for language learning. Language is a dynamic system, and developing fluency requires active engagement from the learner.

Furthermore, real-world language use often deviates from textbook examples. Exposure to diverse speakers, as offered by Lingoda’s format – which doesn’t focus on pairing students with a single instructor – is highly beneficial.

A Flexible Teaching Model

Lingoda’s teaching model shares similarities with the gig economy, though it differs from roles like delivery driving or cleaning. Teachers have the autonomy to set their own schedules and accept classes independently.

Students pay for courses on a tiered pricing structure, influenced by factors such as class type (group or one-on-one), frequency of use, and the language being studied. Per-class prices generally range from $6.75 to $14.30. Students can request specific teaching levels, though fulfilling these requests may take between one day and a week, typically resulting in classes of one to five students. Teachers are responsible for initiating classes themselves, aligning with established language learning labor standards.

“Our structure closely mirrors traditional in-person language schools, where teachers work part-time in accordance with local regulations and maintain scheduling flexibility,” a spokesperson explained. “We simply bring these classes online while adhering to the same local guidelines.”

Certification and the Evolving Edtech Landscape

Upon completing a course, Lingoda provides students with a certification. For English learners, the platform offers the option to take a recognized Cambridge assessment to verify proficiency.

Lingoda’s growth coincides with the broader expansion of online education, accelerated by recent global events. School closures, increased time at home, and a desire for personal development have driven demand for online learning solutions. The technology supporting this shift continues to evolve.

Addressing a Broad Range of Learning Needs

It’s important to note that Lingoda was established prior to the pandemic and wasn’t solely a product of it. Many of its students are individuals who would have otherwise attended in-person language classes, such as those planning to relocate or study abroad, newcomers needing to learn the local language, or professionals requiring language skills for work.

However, the past year has seen an increased uptake of services like Lingoda as people seek opportunities to prepare for future travel and social interactions. The platform offers a sense of anticipation for a time when we can more easily connect with others around the world.

Investor Confidence and Future Outlook

“The language learning market is increasingly embracing online solutions that offer convenience, flexibility, and affordability,” said Matthias Allgaier, MD at Summit Partners, in a statement. “We believe Lingoda has developed a leading online language learning solution globally and is well-positioned to capitalize on the ongoing digitization of education. We are excited to partner with the Lingoda team and support their future success.” Allgaier will be joining Lingoda’s board of directors.

Updated to reflect an additional investor and a minor adjustment in the funding amount due to currency conversion rates.