A Growing Presence in the Largest Market by Revenue
Babbel, the Berlin-based online language learning service, has announced a significant expansion of its business-to-business (B2B) operations in the United States. This development marks a strategic move for the company, which has been focusing on growing its presence in the U.S. market.
A Milestone Achieved
In the first half of 2022, Babbel sold over 1 million subscriptions in the U.S., cementing its position as the largest market by revenue and the fastest-growing one for the company. This achievement demonstrates the effectiveness of Babbel’s expansion strategy, which has been led by Julie Hansen, the former COO and president of Business Insider, who joined Babbel as its Chief Revenue Officer (CRO) and U.S. CEO a few years ago.
The B2B Opportunity
While Babbel’s consumer business continues to grow rapidly, the company is now turning its attention to the B2B segment, which accounts for only 6% of its total revenue at present. However, Hansen is optimistic about the potential for growth in this area. "B2B is a slower build," she notes, "but it’s growing really nicely. We’re actually ahead of goal so far this year."
Hiring Sales Talent and Building Momentum
To drive growth in the B2B sector, Babbel has recruited a team of sales professionals to work with U.S. businesses. The company is already seeing traction with several major clients, including teams from Major League Baseball (MLB). Hansen highlights that the U.S. market differs significantly from Europe, where Babbel primarily serves white-collar audiences.
Diversifying Revenue Streams
Under Hansen’s leadership, Babbel has been working to diversify its revenue streams beyond its core language learning platform. The company has launched over 20 podcasts in recent years and is also expanding its live classes business. In this area, Babbel has seen significant growth, with live classes experiencing a remarkable 300% year-over-year user growth and 400% year-over-year revenue growth.
A Shift in Business Model
Babbel’s decision to adopt an all-you-can-eat subscription model for its live classes has been instrumental in driving this growth. Hansen attributes the success of this change to the company’s adaptability and willingness to evolve its business strategy. "We’re constantly innovating and improving our products to meet the changing needs of our customers," she emphasizes.
Pandemic-Related Tailwinds
Babbel, like many other educational apps, benefited from a surge in demand during the early stages of the pandemic. As people spent more time at home, they turned to language learning as a way to pass the time and expand their skills. Interestingly, Babbel did not experience a slowdown even during the later phases of the pandemic, which Hansen attributes to the growing importance of travel as a motivator for customers.
The Future Ahead
With its B2B business expanding in the U.S., Babbel is well-positioned to build on its success and further establish itself as a leading player in the language learning market. As Hansen notes, "We’re just getting started." The company’s commitment to innovation, adaptability, and customer satisfaction will undoubtedly serve it well as it continues to grow and evolve.
Key Takeaways
- Babbel has sold over 1 million subscriptions in the U.S. in the first half of 2022.
- The company is expanding its B2B operations in the U.S., with a focus on growing its presence among businesses.
- Babbel’s consumer business continues to grow rapidly, while the B2B segment accounts for only 6% of total revenue at present.
- The company has seen significant growth in its live classes business, with 300% year-over-year user growth and 400% year-over-year revenue growth.
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