With the rapid rise in recent years of online language
learning platforms such as Babbel, which has over 25 million app downloads to
date, or freemium model-based social network language learning platform Busuu,
which now boasts over 50 million users, the English language edtech market has
effectively evolved beyond the grasp of all but a handful of truly savvy
companies. As of earlier this year, over 60 million people were signed up to
use the free, gamified Duolingo platform, which lets anyone via browser or
smartphone app study languages, taking advantage of the platform’s adaptive
language teaching technology.
However, Duolingo, which has taken in nearly $40 million in
VC to date and even started shoveling out crowdsourced translation services to
the likes of Buzzfeed and CNN as early as 2013, still doesn’t really have a
revenue model to speak of. Looking at the underlying nature of the market
today, it is easy to understand how Livemocha, despite over 16 million users
and $19 million in funding, ended its startup run in an $8.5 million buyout by
Rosetta Stone (NYSE: RST) last year. LinkedIn’s (NYSE: LNKD) $1.5 billion
acquisition of renowned online education company Lynda.com last year – which is
widely known in tech circles for its comprehensive, highly-valuable courses
from industry experts, as well as its affordable prices – speaks volumes about
where we are at in the evolution of the edtech market.
Furthermore, consider the following data point from June of
this year by founder of the EdTech Europe conference, Benjamin
Vedrenne-Cloquet, that edtech currently still represents less than five percent
of the $4 trillion global education market. There is massive growth potential
here and one of the biggest targets moving forward will be Latin America, where
over 600 million people speak just two languages. Populations are largely
resident in 20 or so major metropolitan centers throughout Latin America and in
key markets such as Brazil, the nearly ubiquitous penetration of both broadband
and smartphone coverage spells big success for companies that can deliver
meaningful, truly useful digital content, as well as the ancillary services
needed to learn English.
In stark contrast to now prevalent academic MOOC (massive
open online course) programs, up-and-comer Udemy (which recently did a $65
million raise, led by private equity/VC firm, Stripes Group) is focused
specifically on offering experts from any field the ability to create courses
and offer them to the public, either for free, or for a tuition fee. This is
sort of like Uberizing the Lynda.com model. According to head of business
development for Udemy in Latin America, Brazil’s connectivity penetration leads
the way as an example of where the regional edtech market is headed, and
because the government allows for one fifth of the higher education curriculum
to be delivered online in a partially unregulated space, the potential 25
million consumer market (core market of 7 million paying students) in Brazil
has some of the highest margins available anywhere.
For an established edtech provider like Lingo Media (OTCQB:
LMDCF) (TSX-V: LM) though, it’s about far more than simply generating the sort
of healthy revenues evinced by its recent Q2 financial reportage, which showed
776 percent year-over-year revenue growth in digital learning, overtaking
print-based revenue for the first time in the company’s history. Lingo Media is
clearly driven by a strong, underlying mission to fundamentally change the way
the entire world learns English.
In addition, the company is driven by the opening up of new
markets, and providing best-in-class, innovative online, as well as print-based
solutions. The recently announced securing by Lingo Media of a multi-million
dollar software development contract with the Colombian Ministry of Labour’s
National Training Service, SENA (Servicio Nacional de Aprendizaje), to provide
a variety of digital resources and content that will be incorporated into
SENA’s LMS (learning management system), is a solid indicator of how the
company is currently making huge strides in Latin America.
Secured via a partnership between Lingo Media’s wholly-owned
ELL Technologies subsidiary and Colombian ESL edtech digital platform
developer, eDistribution, this multi-million dollar software development deal
puts Lingo Media at the forefront of what is an ongoing campaign by Colombia’s
government to leverage the nation’s substantial human capital via language
learning. English is mandated in all schools by official Colombian policy under
the PFDCLE (Foreign Languages Competencies Development Programme), with the
goal of making the entire country bilingual, following CEFR (Common European
Framework of Reference for Languages) proficiency standards.
Given that eDistribution is a specialist in the field of
developing enhanced digital resources for second language classroom practices,
and that ELL Technologies’ product suite spans the gamut from contextual-based
training to comprehensive, SCORM-compliant achievement testing – putting
together a winning package of digital resources, lessons, and learning objects
for SENA should be a snap for the pair. The highly customizable and fluid
framework that will be provided to educators, which will allow unprecedented
ease of access to tools enabling dynamic coursework and in-class session
development, no doubt will come to serve as a living advertisement for other
regional markets.
Columbia’s SENA is laser-focused on digital content and this
sweetheart deal is a major feather in Lingo Media’s cap. A deal which will
serve to further open up the Latin American market, giving the company an ever
more stable footing, amid the Permian Sea-like development of what continues to
be one of the hottest markets in edtech today.
All around the world today, some two billion people or more
are trying to learn the English language. In China, kids start learning English
as early as grade three, and its teaching is mandated by law. China has become
the largest English-speaking country on earth as a result of this practice and
Lingo Media’s print based roots are firmly established in this key global
market, with a wide range of popular educational text books and learning tools
available through the company’s publishing unit, Lingo Learning.
Learn more, visit Lingo Media online at: www.lingomedia.com
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