Speak Raises $78M to Revolutionize Language Learning with AI

A Novel Approach to Language Acquisition: Speak Secures $78 Million in Series C Funding

Traditional language instruction often prioritizes reading and writing skills. However, the way native speakers initially acquire language is through listening and speaking. Speak has developed a platform that replicates this natural learning process, leveraging artificial intelligence to generate audio conversations and assess user responses, thereby enhancing language proficiency.

Significant Investment and Valuation Growth

Speak has recently announced a substantial funding round, securing $78 million in Series C financing. This investment elevates the company’s valuation to $1 billion.

Accel is leading the funding round, with participation from existing investors including OpenAI’s Startup Fund, Khosla Ventures, and Y Combinator.

This fundraise represents a considerable advancement for the company, following a previously confirmed Series B extension of $20 million at a $500 million valuation just six months prior.

The Role of Generative AI and OpenAI

The surge in investment may be attributed to the growing excitement surrounding generative AI. Speak’s partnership with OpenAI, a key investor, is particularly noteworthy. The company utilizes OpenAI’s technology to power its platform and is an early adopter of the latest advancements in speech technology from the ChatGPT creator.

Ian Hathaway, a partner at OpenAI’s Startup Fund, stated, “Our 2022 investment in Speak was driven by a shared vision of revolutionizing language learning with AI.” He further added, “We’re thrilled to see their world class AI talent and unique product vision create transformative learning experiences for a rapidly growing userbase worldwide.”

Expansion Plans and Target Languages

A primary objective of the funding will be to broaden the range of languages available for users to learn on the Speak platform. Initial expansion will focus on Spanish and French, thereby increasing the company’s potential customer base.

For the past eight years, Speak has concentrated on individuals learning English, the most widely studied language globally. The platform offers learning and review materials designed to complement existing coursework.

Currently, the company supports eight originating languages for English learners, based on the most prevalent language groups among those studying English.

Addressing the Core Challenge: Conversational Fluency

“For the one and a half billion people out there trying to learn English, the vast majority of them have spent 15+ years learning intensely. They know vocabulary and grammar better than any of us,” explained CEO Connor Zwick, co-founder alongside Andrew Hsu (CTO). “But the issue is that they have no ability to speak it.”

Zwick emphasized that Speak’s core value proposition is to empower individuals to communicate effectively in their target language.

User Base and Revenue Model

The 1.5 billion figure represents Speak’s total addressable market, not its current user base. While the company does not disclose active user numbers, CTO Andrew Hsu revealed that the app has been downloaded over 10 million times.

Average user engagement is approximately 10-20 minutes per day, with a subscription cost of $20 per month or $99 per year – a cost-effective alternative to traditional human tutoring.

Speak for Business, the company’s enterprise solution, currently serves over 200 customers.

The Speak Learning Methodology

Zwick describes Speak as a combination of a learning methodology and a technology platform, operating through a three-step process.

The initial step involves immersion in listening and speaking. This approach is particularly interesting given that Zwick and Hsu initially connected and began collaborating as Thiel Fellows, an experience focused on building enterprises rather than extensive formal education.

“We’re not going to explain every single grammatical rule to you,” Zwick stated, outlining the first phase of the program.

The second step focuses on repeated application of new terms and phrases through “drills where you just practice saying it out loud with various other pieces of languages so that it becomes automatic, with no translation.”

Finally, Speak presents the phrase in “a real-world context using AI… That’s how you really anchor it,” Zwick explained.

AI-Powered Learning Without Human Intervention

Notably, the entire learning process is driven by AI, utilizing speech recognition, natural language processing, and generative AI to personalize the experience for each learner. There is no human interaction involved.

Validation and Future Development

Currently, Speak does not integrate with standardized language learning qualifications. However, the company is considering this as a future direction.

Zwick clarified, “We are explicitly trying not to be a test prep solution, frankly, because, unfortunately, all tests so far are imperfect.” He added, “What ends up happening is that people end up gaming tests. They’re not trying to become good at actually being able to communicate and use the language in the real world.”

Hsu suggested that the company’s current system for quantifying fluency could eventually lead to the development of a more accurate English fluency score or test.

Beyond Core Functionality: Gamification and Behavioral Mechanisms

Gamification, a popular trend in online learning, has not yet been implemented in Speak. However, the company is open to exploring this avenue.

Zwick stated, “Now with more staff, there’s room to bring more of those behavioral mechanisms into the app to result in positive change for the users.” He emphasized that efficacy will always be prioritized over gamification, stating, “When there’s a tug of war between gamification and engagement and efficacy, we will pick efficacy 100% of the time.”

Ben Quazzo, a partner at Accel and the lead investor, will join Speak’s board of directors. He commented, “Speak has emerged as a standout player in consumer AI, demonstrating exceptional growth and market potential.”