Language learning startup Toucan raises $4.5M

Toucan, a startup that helps users learn a new language while they browse the web, is announcing that it has raised an additional $4.5 million in seed funding.

As I wrote last fall, the Santa Monica, Calif.-based startup has built a Chrome extension that scans the text of whatever website you’re reading and translates select words into whichever language you’re trying to learn. That means you’re expanding your vocabulary without having to make time to study or otherwise change your behavior.

Toucan currently supports seven languages — Spanish, Korean, French, German, Italian, Portuguese and Japanese. Co-founder and CEO Taylor Nieman said the company now has around 60,000 monthly active users, all acquired organically.

“On the surface, Toucan can look like a toy, but there’s massive engineering tech on the backend,” Nieman added.

For one thing, although the startup has a team of human translators, it also relies on machine learning and natural language processing to understand the context of each word and make sure it’s being translated properly. Nieman also said that the company also takes an intelligent, personalized approach to the translations that appear over time, allowing them to become more complex in order to keep challenging users.

Toucan screenshot

Image Credits: Toucan

Toucan is free, but users can subscribe to Toucan Premium, which starts at $4.99 per month and offers a higher density of translated words. Premium subscribers can also opt in or out of advertising — apparently the ability to “own” a word (a.k.a. have your sponsorship message appear anytime that word is translated) is popular enough that some paying users don’t want to lose it.

Toucan has now raised a total of $7.5 million. The new round was led by LightShed Ventures, with participation from new investors Next Play Ventures, Concrete Rose Capital, GingerBread Capital, Form Capital, Goodwater Capital, Hampton VC, Spacecadet Ventures, GTMfund, Baron Davis Enterprises and Human Ventures, as well as existing investors GSV Ventures, Amplifyher Ventures and Vitalize.

“Screen time is escalating globally with younger generations living their lives always connected,” said LightShed Ventures General Partner Richard Greenfield in a statement. “Toucan seamlessly integrates language learning into the websites (and soon apps) you are already using via a simple browser extension transforming screen time into learning time.”

Nieman said Toucan will use the new funding to expand the team from 12 to 16. It’s also planning to internationalize — so not just translating English to Spanish, but Spanish to English, and so on — and is launching a new Safari extension (it will support more browsers in the future). The ultimately vision is for Toucan to be “layered wherever you are.”

“We want to be this augmented layer of learning on the web, on mobile browsing, the most popular social apps and even in the physical world,” she said, predicting that in the future, you might be “wearing a crazy cool contact lens that can translate a sign on the subway and provide you with those same micro-moments of learning.”

India’s Lead School raises $30 million to reach more students

An Indian startup that is helping digitize and transform affordable private schools to better serve students from middle and low-income groups of families said on Monday it has raised $30 million in a new financing round as it looks to scale its efforts in the world’s second most populous nation.

GSV Ventures and WestBridge led the Series D financing round of the Indian startup, which has raised over $69 million to date.

LEAD School, founded by Sumeet Mehta and Smita Deorah in 2012, has developed an integrated system to help K-12 schools with the curriculum they teach, how they teach them, secure books and other resources, and better evaluate the learning outcome.

Tthe startup set up its own schools in rural areas in India in its early years to identify the challenges that students and teachers faced. A key insight they found was that students struggled with english and needed years-worth of learning to be able to just fully understand any other subject.

“We were always data centric. We measured our performance based on student data. How well our classes looked was not a criteria for success,” said Deorah in an interview with TechCrunch.

In the past few years, LEAD School has grown by working with affordable private schools. Deorah said this strategy has helped the startup scale its technology stack and reach more students.

Amid the global pandemic, which prompted New Delhi to shut schools last year, LEAD School’s offering has proven even more useful to schools. The startup, which today caters to over 2,000 schools and 800,000 students, grew by 3X last year, it said.

“LEAD School is rapidly emerging as a paradigm for transforming K-12 education. Based in India and partnered with affordable school owners (a segment that is larger than the entire US K-12 system), LEAD serves over 800,000 students today,” said Deborah Quazzo, Managing Partner at GSV Ventures, in a statement.

“LEAD has experienced tremendous growth because of its consistent delivery of high academic outcomes to students and high ‘return on education’ to teachers, school owners and parents. GSV is honored to be investing in an organization that is changing the life trajectory of so many students.”

This is a developing story. More to follow…

What the MasterClass effect means for edtech

MasterClass, which sells a subscription to celebrity-taught classes, sits on the cusp of entertainment and education. It offers virtual, yet aspirational learning: an online tennis class with Serena Williams, a cooking session with Gordon Ramsay. While there’s the off chance that an instructor might actually talk to you — it has happened before — the platform mostly just offers paywalled documentary-style content.

The vision has received attention. MasterClass is raising funding that would value it at $2.5 billion, as scooped by Axios and confirmed independently by a source to TechCrunch. But while MasterClass has found a sweet spot, can the success be replicated?

Investors certainly think so. Outlier, founded by MasterClass’ co-founder, closed a $30 million Series C this week, for affordable, digital college courses. The similarities between Outlier and its founder’s alma mater aren’t subtle: It’s literally trying to apply MasterClass’ high-quality videography to college classes. This comes a week after I wrote about a “MasterClass for Chess lovers” platform launched by former Chess World Champion Garry Kasparov.

Two back-to-back MasterClass copycats raising millions in venture capital makes me think about if the model can truly be verticalized and focused down into specific niches. After 2020 and the rise of Zoom University, we know edtech needs to be more engaging, but we don’t know the exact way to get there. Is it by creating micro-learning communities around shared loves? Is it about gamification? Aspirational learning has different incentives than for-credit learning. In order to be successful, Outlier needs to prove to universities it can use MasterClass magic for true outcomes that rival in-person lectures. It’s a harder, and more ambtious promise.

My riff aside, I turned to two edtech founders to understand how they see the MasterClass effect panning out, and to cross-check my gut reaction.

Taylor Nieman, the founder of language learning startup Toucan:

Although I do love how these models try to lean into this theme of “invisible learning” like we leverage with Toucan, it faces the same issues as so many other consumer products that try to steal time out of people’s very busy days. Constantly competing for time leads to terrible engagement metrics and very high churn. That leads me to question what true learning outcomes could occur from little to no usage of the product itself.

Amanda DoAmaral, the founder of Fiveable, a learning platform for high school students:

Masterclass is important for showing us why educational content should be treated more like entertainment. All of our bars for content quality is much higher now than it ever was before and I’m excited to see how that affects learning across the board.

For students, it’s about creating environments that support them holistically and giving them space to collaborate openly. It feels so obvious that these spaces should exist for young people, but we’ve lost sight of what students actually need. At my school, we built policies that assumed the worst in students. I want to flip that. Assume the best, be proactive to keep them safe, and create ways to react when we need to.

Anyways, that’s just some nuance to chew on during this fine day. In the rest of this newsletter, we will focus a lot on tactical advice for founders, from the money they raise to the peacock dance they might want to do one day. Make sure to follow me on Twitter @nmasc_ so we can talk during the week, too!

The peacock dance

You know when male peacocks fan their feathers to court a lover? That, but for startups trying to get acquired. As one of our many rabbit holes on Equity this week, we talk about Discord walking away from a Microsoft deal, and if that deal ever existed in the first place or if it was just a way to drum up investor excitement in the audio gaming platform.

Here’s what to know: Discord is reportedly pursuing an IPO after walking away from talks with multiple companies that were looking to acquire the audio gaming giant.

Discord aside, the consolidation environment continues to be hot for some sectors.

Four business people used ropes to tighten their money bags, economic austerity, reduced income, economic crisis

Image Credits: VectorInspiration / Getty Images

Even venture capital knows that the future isn’t simply venture capital

Clearbanc, a Toronto-based fintech startup that gives non-dilutive financing to businesses, has rebranded alongside a $100 million financing that valued it at $2 billion. Now rebranded as Clearco, the startup wants to be more than just a capital provider, but a services provider, too.

Here’s what to know: The startup has been on a tear of product development for the past year, launching services such as valuation calculators or runway tools. It’s a step away from what Clearbanc originally flexed: the 20-minute term sheet and rapid-fire investment. I talk about some of the levers at play in my piece:

Many of Clearco’s newest products are still in their infancy, but the potential success of the startup could nearly be tied to the general growth of startups looking for alternatives to venture capital when financing their startups. Similar to how AngelList’s growth is neatly tied to the growth of emerging fund managers, Clearco’s growth is cleanly related to the growth of founders who see financing as beyond a seed check from Y Combinator.

abstract human brain made out of dollar bills isolated on white background

Abstract human brain made out of dollar bills isolated on white background. Image Credits: Iaremenko / Getty Images

Don’t market your opportunity away

Keeping on the theme of tactical advice for founders, let’s move onto talking about marketing. Tim Parkin, president of Parkin Consulting, explained how startup founders can use marketing as a tool to stand out in the noisy environment. Differentiation has never been harder, but also more imperative.

Here’s what to know: Parkin outlines four ways that martech will shift in 2021, strapped with anecdotes and a nod to the importance of investing in influencers.

Red ball on curved light blue paper, blue background. Image Credits: PM Images / Getty Images

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Thanks for reading along today and everyday. Sending love to my readers in India and everyone around the world that is facing yet another deadly surge of this horrible disease. I’m rooting for you.

N

Since colleges are failing to prepare students for tech jobs, it’s time to bring back apprenticeships

You can always tell a system is broken when you change the inputs and the outcomes don’t improve. Any software engineer will tell you that.

Using this metric, it’s clear the United States’ antiquated higher education system is truly broken. Overpriced and underperforming, the system is failing on two key fronts: addressing racial inequalities and closing our country’s growing tech skills gaps.

For all the changes made to the system to welcome people of color into the classroom, the outcomes in terms of wealth, equity distribution and representation are worse than ever.

On average, Black college graduates owe $25,000 more in student debt than their white peers. Worse still, four years after throwing their caps in the air, 48% of Black graduates owe an average of 12.5% more than they borrowed in the first place.

A labor market built on degree requirements has little hope of correcting course.

While colleges and universities do as good a job as they’ve ever done at preparing students with the cognitive and critical thinking skills they’ll need to be successful in the long run, the college system just isn’t providing the right training for jobs in 2021.

Looking past the college experience, the unemployment rate for Black Americans stands at nearly 10%, compared with 5.5% for white Americans, while the typical Black American family has eight times less wealth than a white family. This is coupled with the fact that Black people make up just 4.1% of Russell 3000 board members — compared to 13.4% of the population.

This isn’t just a matter of grave injustice. The racial wealth gap costs the U.S. economy $1 trillion to $1.5 trillion in GDP output each year. There is a financial and moral imperative to do something about it.

Then there’s the skills gaps: For all the belated changes made to academic programs and curricula, and while colleges and universities do as good a job as they’ve ever done at preparing students with the cognitive and critical thinking skills they’ll need to be successful in the long run, the college system just isn’t providing the right training for jobs in 2021. Ten years ago, 56% of CEOs were “extremely” or “somewhat” concerned by the lack of talent for digital roles. By 2019, this had jumped to 79%. This is why well over 50% of new and recent graduates are underemployed in their first jobs out of college (two-thirds of whom will be underemployed five years later, and half a decade later).

There must be a better way. A way that empowers young people to achieve in-demand skills while avoiding the decades-long burden of student loans. A way that doesn’t discriminate based on socioeconomic background while exposing talent-hungry employers to a new pool of qualified, driven individuals.

In the explosion of edtech businesses with new approaches, we are in danger of overlooking an established model that can be adapted to solve these challenges. That model is apprenticeships.

The apprenticeship movement

There’s a lingering perception in America that apprenticeships are the province of construction and building trades, or even medieval guilds like smithing and glass-blowing. Well, not anymore. While we’ve been focused on edtech, or despairing over the widening skills gap, apprenticeships have been rebooted. Modern, tech-driven apprenticeships are emerging as a faster, cheaper and more impactful alternative to higher education.

In Europe, tech companies — and nontech companies increasingly hiring entry-level workers with discrete tech skills — are already leveraging apprenticeships to provide a direct route into the labor market for diverse talent. From software engineers to data analysts, the apprentice of the 21st century is as likely to wield a keyboard as a wrench.

Fully employed from day one, apprentices earn a wage while they learn on a program that is entirely free to the individual. Their training is delivered alongside their role, with this applied learning approach ensuring relevant skills are tested and embedded right away.

Part of the challenge presented by the existing system is that college provides a single shot of learning at the start of a career, with a focus on knowledge rather than skills. Instead of time-consuming traditional education models, we should be encouraging companies to focus on training individuals for highly skilled jobs and adapting training as roles shift through a lifelong learning journey.

Against a college system churning out graduates armed with knowledge of limited applicability in the workplace, apprentices have real-work experience and transferable skill sets in the tech and digital spaces.

As we write this, tech apprenticeships represent less than 1% of American apprenticeships , while 78% of apprentices are white. But change is in the air. In recent weeks, the Biden administration has gone out of its way to highlight tech as a growth area for apprenticeships.

The president also announced his commitment to raising apprenticeship standards, starting with casting off industry-recognized apprenticeship programs lacking in quality and training rigor.

These aren’t just words, either. The apprenticeship reboot will be powered by a new National Apprenticeship Act . This proposed legislation commits $3 billion over the next five years to expanding registered apprenticeship programs across a range of industries. If it’s done right, tech will be front and center.

The benefit to businesses

All this is welcome good news for businesses desperate to close skills gaps. As roles evolve at an ever-faster pace, it’s becoming more and more difficult to know what a college degree actually says about an individual’s ability. Yes, they went to a “good” school. But when half of Americans say their degree is irrelevant to their current role, how does prestige translate to jobs, let alone ability to perform in the workplace?

Increasingly operating in the dark, tech businesses and nontech managers hiring for tech roles are competing with each other to poach experienced talent into senior roles. It’s continuing to fish in a very limited, homogeneous pool and an expensive short-term solution.

Professional apprenticeships allow business leaders to be more strategic and proactive in their hiring practices. They can mold apprentices to the roles they actually need to fill while focusing on their organization’s specific requirements. It beats relying on uniform, outdated education models.

Better still, by training apprentices from the start of their career, companies inspire loyalty and eliminate the tricky transition phase recent grads and external hires usually need. Once converted to full-time employees, apprentices tend to persist for twice as long as traditional direct hires.

While skills gaps are created by the future racing toward us, racial inequalities are rooted in our past. Professional apprenticeships help break down entrenched structural barriers to careers in industries like tech.

Most important, they look beyond the degree requirements that screen out 67% of Black and 79% of Hispanic Americans. Because apprenticeships are paid pathways to economic opportunity, they truly level the playing field and allow companies to make genuine advances toward racial equality — beyond a few neatly crafted Instagram posts. Meanwhile, by tapping into diverse talent pools early, businesses can develop individuals and build real, recognizable routes to the boardroom.

They would be right, too. A 2020 report by McKinsey found companies with the highest diversity earned 35% more than their industry average. Similarly, the share returns of the most diverse companies in the S&P 500 outperformed the least diverse by a staggering 240%.

The time for change is now. According to the National Center for Education Statistics, 41% of grads end up in roles that don’t require a degree. With COVID-19 hitting young workers particularly hard, this figure is set to rise unless we embrace new approaches, including professional apprenticeships. In creating a direct and meaningful career pathway for young adults, they can help businesses close skills gaps and hit their much-vaunted diversity targets.

There’s no single solution to these challenges. But the professional apprenticeship can be education’s biggest contribution.

 

Proctorio sued for using DMCA to take down a student’s critical tweets

A university student is suing exam proctoring software maker Proctorio to “quash a campaign of harassment” against critics of the company, including accusations that the company misused copyright laws to remove his tweets that were critical of the software.

The Electronic Frontier Foundation, which filed the lawsuit this week on behalf of Miami University student Erik Johnson, who also does security research on the side, accused Proctorio of having “exploited the DMCA to undermine Johnson’s commentary.”

Twitter hid three of Johnson’s tweets after Proctorio filed a copyright takedown notice under the Digital Millennium Copyright Act, or DMCA, alleging that three of Johnson’s tweets violated the company’s copyright.

Schools and universities have increasingly leaned on proctoring software during the pandemic to invigilate student exams, albeit virtually. Students must install the school’s choice of proctoring software to grant access to the student’s microphone and webcam to spot potential cheating. But students of color have complained that the software fails to recognize non-white faces and that the software also requires high-speed internet access, which many low-income houses don’t have. If a student fails these checks, the student can end up failing the exam.

Despite this, Vice reported last month that some students are easily cheating on exams that are monitored by Proctorio. Several schools have banned or discontinued using Proctorio and other proctoring software, citing privacy concerns.

Proctorio’s monitoring software is a Chrome extension, which unlike most desktop software can be easily downloaded and the source code examined for bugs and flaws. Johnson examined the code and tweeted what he found — including under what circumstances a student’s test would be terminated if the software detected signs of potential cheating, and how the software monitors for suspicious eye movements and abnormal mouse clicking.

Johnson’s tweets also contained links to snippets of the Chrome extension’s source code on Pastebin.

Proctorio claimed at the time, via its crisis communications firm Edelman, that Johnson violated the company’s rights “by copying and posting extracts from Proctorio’s software code on his Twitter account.” But Twitter reinstated Johnson’s tweets after finding Proctorio’s takedown notice “incomplete.”

“Software companies don’t get to abuse copyright law to undermine their critics,” said Cara Gagliano, a staff attorney at the EFF. “Using pieces [of] code to explain your research or support critical commentary is no different from quoting a book in a book review.”

The complaint argues that Proctorio’s “pattern of baseless DMCA notices” had a chilling effect on Johnson’s security research work, amid fears that “reporting on his findings will elicit more harassment.”

“Copyright holders should be held liable when they falsely accuse their critics of copyright infringement, especially when the goal is plainly to intimidate and undermine them,” said Gagliano. “We’re asking the court for a declaratory judgment that there is no infringement to prevent further legal threats and takedown attempts against Johnson for using code excerpts and screenshots to support his comments.”

The EFF alleges that this is part of a wider pattern that Proctorio uses to respond to criticism. Last year Olsen posted a student’s private chat logs on Reddit without their permission. Olsen later set his Twitter account to private following the incident. Proctorio is also suing Ian Linkletter, a learning technology specialist at the University of British Columbia, after posting tweets critical of the company’s proctoring software.

The lawsuit is filed in Arizona, where Proctorio is headquartered. Proctorio CEO Mike Olson did not respond to a request for comment.

Ornikar raises $120M as its driving school marketplace goes up a gear with car insurance

A French startup that set out to bring a new approach to driver education and road safety, and then used that foothold to expand into the related area of car insurance, is today announcing a big round of funding to continue building its service across Europe.

Ornikar, which prepares people for driving tests by providing online drivers education courses, lets those users organize in-person lessons with driving instructors, provides a booking system for taking their written and practical examinations, and finally provides them with competitive rates for getting car insurance as new drivers, has raised €100 million ($120 million).

The company intends to use the funding to expand its business. Drivers education services are live today in France and Spain, while insurance is offered today only in France: the plan will be to expand both of those to more markets.

The Series C is being led by KKR, with previous investors Idinvest, BPI, Elaia, Brighteye, and H14 also participating. Benjamin Gaignault, Ornikar’s CEO who co-founded the company with Flavien LeRendu (who also jointly holds the title of CEO), said the startup is not disclosing its valuation, but we understand from a source that it is around $750 million. The company has raised $175 million to date.

Ornikar has been around since 2013 and was founded, in Gaignault’s words, “to disrupt driving education.”

Coming into the market at a time when most of the process of organizing, learning and booking your driving education was not only very fragmented but completely offline, Ornikar’s internet-based offering represented a step change in how French people learned to drive: the process not only became easier, but on average about 40% cheaper to arrange.

Ornikar’s driving education business today includes not just online course materials and booking services, but a network of instructors across 1,000 towns and cities in France, and a business that launched last year in Spain, under the Onroad brand. Some 1.5 million people have taken Ornikar’s driving education courses to date, with another 2 million using its driving school, with growth accelerating: 420,000 new customers signed up with Ornikar in the last year alone.

Last year was a tricky one for companies in the business of transportation. People were generally staying put and not traveling anywhere, but when they were getting around, they wanted plenty of their own space to do so.

Translating that to markets like France and Spain where many towns will have solid public transportation and taxi services, people might have opted to use these less, looking instead to private vehicles in their place. And translating that to Ornikar, Gaignault said that people being at home more, and looking to use the time productively with a view to driving more in the future, the startup saw business growing by 30% each month last year.

Interestingly, it was in the middle of the pandemic that Ornikar launched its car insurance product, which came out of the same impetus as the driver education services: it was built to fill a hole in the market rethought with Ornikar’s users in mind.

Car insurance in France — a €17 billion ($20 billion) market annually — is dominated by big players, and when it comes to first-time drivers and looking for competitive rates, “the bigger companies are not comfortable with user experience,” said Gaignault. “It’s pretty poor and not aligned with expectations of the customers.”

The car insurance product — sold as Ornikar Assurance — is now on track to hit some 20,000 users by August (when it will have been in the market for a year).

While it accounts today for a small fraction of Ornikar’s revenues compared to its driver education platform, that take up — not just from alums of Ornikar’s drivers ed, but from those who had never used an Ornikar service before — is a good sign that it’s on to something big, Gaignault said.

“In October we noticed that 80% of our new insurance customers were not coming from Ornikar but from social media, Google ads and other outside sources,” he said. “That’s why we decided to create a new business unit and explore a business as an insuretech.”

But, he added, that will not be at the expense of the driving education: the two go hand in hand for a common goal of improving how people drive and improving road safety. Indeed, Gaignault said he envisions a time when one will feed into the other: not only will the driving school serve as a way of bringing in new insurance customers, but insurance rates can be impacted by how many driving courses a person takes to keep their knowledge of the driving code and best practices fresh.

“Ornikar has done a tremendous job creating a great experience for students and driving instructors through engaging online education courses and a well-designed marketplace,” said Patrick Devine, director at KKR and member of the Next Generation Technology Growth investment team. “We are thrilled to invest behind Benjamin, Flavien, and their talented team as they expand internationally and accelerate their insurance offering following the successful launches of Onroad in Spain and Ornikar Assurance.”

Tom Brady and Salesforce Ventures pour millions into Class, a Zoom-friendly edtech startup

Class, an edtech startup that integrates exclusively with Zoom to make remote teaching more elegant, has raised $12.25 million in new financing. The round brings Salesforce Ventures, Sound Ventures and Super Bowl champion Tom Brady onto its capital table.

CEO and founder Michael Chasen said that Marc Benioff, the CEO of Salesforce, approached the company about investing in Class. Salesforce Ventures launched a $100 million Impact Fund in October 2020, a month after Class launched, to back edtech companies and cloud enterprises businesses with an impact lens.

As for Tom Brady entering the edtech world, Chasen said that the famous football player has made tech investments in the past and, “as the father of three is passionate about helping people through education.”

“Tom Brady and I are both fathers to three kids and like all parents, we get the need to add teaching and learning tools to Zoom,” Chasen added.

Class has now raised $58 million in less than a year, with a $30 million Series A in February 2021 and a $16 million seed round in September 2020. Today’s raise is less than its Series A round, which signals it was likely more done strategically to bring on investors than out of necessity.

The money will be used to help roll out Class to K-12 and higher-ed institutions across the world. The startup’s software publicly launched on the Mac a few months ago, and will exit beta for Windows, iPhone, Android and Chromebook in the next few weeks, Chasen said. The larger public launch will help scale the some 7,500 schools that have shown interest in adopting Class.

The big hurdle for Class, and any startup selling e-learning solutions to institutions, is post-pandemic utility. While institutions have traditionally been slow to adopt software due to red tape, Chasen says that both of Class’ customers, higher ed and K-12, are actively allocating budget for these tools. The price for Class ranges between $10,000 to $65,000 annually, depending on the number of students in the classes.

“We have not run into a budgeting problem in a single school,” Chasen said in February. “Higher ed has already been taking this step towards online learning, and they’re now taking the next step, whereas K-12, this is the first step they’re taking.” So far, Class has more than 125 paying clients with even-split between K-12 and higher ed, and 10% of customers using it for corporate teams.

It’s not the only startup that is trying to reinvent Zoom University. A number of companies are trying to serve the same market of students and teachers who are fatigued by current video conferencing solutions which — at best — often look like a gallery view with a chat bar. Three companies that are gaining traction include Engageli, Top Hat and InSpace.

While each startup has its own unique strategy and product, the founders behind them all need to answer the same question: Can they make digital learning a preferred mode of pedagogy and comprehension — and not merely a backup — after the pandemic is over?

As that question continues to get explored, today’s news shows that Class isn’t having any trouble recruiting people to believe the answer is yes. In just nine months, the company has gone from two to more than 150 employees and contractors.

Indonesian edtech CoLearn gets $10M Series A led by Alpha Wave Incubation and GSV Ventures

A Zoom screenshot with CoLearn's founding team: Marc Irawan, Abhay Saboo and Sandeep Devaram

A Zoom screenshot with CoLearn’s founding team: Marc Irawan, Abhay Saboo and Sandeep Devaram

Indonesian startup CoLearn started as a chain of physical tutoring centers and was in the process of shifting to a hybrid offline-online model when the COVID-19 pandemic hit. The team sensed that remote learning would permanently change how students want to be tutored and decided to focus completely on its app, which launched in August 2020. CoLearn has since been downloaded more than 3.5 million times and has about one million active users, mostly students in grades 7 to 12.

The company announced today it has raised $10 million in Series A funding co-led by Alpha Wave Incubation and edtech-focused GSV Ventures. This marks the first time both have made an investment in Indonesia. The round also included participation from returning investors Sequoia Capital India’s Surge and AC Ventures.

One of the Jakarta-based company’s goals is to improve educational standards in Indonesia. The country’s PISA (Programme for International Student Assessment, a global ranking system created by the Organisation for Economic Co-operation and Development) rankings are in the bottom 10% for math, science and reading. CoLearn’s goal is to help move up Indonesia’s PISA ratings to the top 50% over the next five years.

CoLearn’s app offers more than 250,000 pre-recorded videos with homework help. The videos serve as a hook to convince students (or their parents) to sign up for CoLearn’s live online classes.

Screenshots from CoLearn, an Indonesian online learning app

CoLearn screenshots

The company’s co-founders are Abhay Saboo, Marc Irawan and BYJU product team alum Sandeep Devaram. Despite being the world’s fourth most populous country with 270 million people, Indonesia has not seen the same level of investment and innovation in its educational infrastructure as countries like China or India, Saboo told TechCrunch. “We’re trying to solve the problem of how do you change mindsets, how do you change motivation, how do you increase in confidence levels?”

CoLearn started its offline in business in 2018, before shifting to a hybrid model. Once the pandemic hit, the company decided to go fully online. Even after schools reopen, the team anticipates that most students will prefer the convenience of online afterschool learning because going to brick-and-mortar tutoring centers can eat up hours of their time each day, Saboo said.

CoLearn’s users ask about 5 million questions through the app each month. Its AI platform matches them with video tutorials, recorded by more than 400 tutors, that break down key concepts. Saboo said creating engaging videos instead of presenting solutions in a diagram is one of the ways CoLearn differentiates from competitors like SnapAsk, which raised $35 million last year to expand in Southeast Asia.

“What we realized is that kids are really craving a step-by-step explanation and this is the TikTok generation, so if a picture says a thousand words, then a video says a million,” he said. He added that students often hit pause on the video when they think they have the answer to a question, before skipping to the end to see if they got it right, indicating that they want to understand concepts instead of simply getting a solution.

CoLearn’s live online classes will be its main priority going forward and the startup hopes to replicate the success of companies like China’s Yuanfadao and Zuoyebang. As part of that goal, it runs teacher training programs and expects to train more than 200 teachers over the next two years, especially in STEM subjects. The company may eventually scale into other countries that have similar issues with their education systems, but Saboo said CoLearn’s plan is to focus on Indonesia for at last the next couple of years.

Other investors in CoLearn include Leo Capital, TNB Aura, S7V, January Capital, Alpha JWC, Taurus Ventures, Alter Global and Mahanusa Capital.

In press statement, GSV Ventures managing partner Deborah Quazzo said, “The opportunity to build efficacious learning solutions for the fourth largest country in the world is vast. The greatest businesses are created when entrepreneurs tackle large, important problems and CoLearn is doing that.”

 

Yak Tack is a super simple app to boost vocabulary

Word nerds with a love for linguistic curiosities and novel nomenclature that’s more fulsome than their ability to make interesting new terms stick will be thrilled by Yak Tack: A neat little aidemémoire (in Android and iOS app form) designed for expanding (English) vocabulary, either as a native speaker or language learner.

Yak Tack uses adaptive spaced repetition to help users remember new words — drawing on a system devised in the 1970s by German scientist Sebastian Leitner.

The app’s core mechanic is a process it calls ‘tacking’. Here’s how it works: A user comes across a new word and inputs it into Yak Tack to look up what it means (definition content for words and concepts is sourced from Oxford, Merriam-Webster, and Wikpedia via their API, per the developer).

Now they can choose to ‘tack’ the word to help them remember it.

This means the app will instigate its system of space repetition to combat the routine problem of memory decay/forgetting, as new information tends to be jettisoned by our brains unless we make a dedicated effort to remember it (and/or events conspire to make it memorable for other, not necessarily very pleasant reasons).

Tacked words are shown to Yak Tack users via push notification at spaced intervals (after 1 day, 2,3,5,8, and 13; following the fibonacci sequence).

Tapping on the notification takes the user to their in-app Tack Board where they get to re-read the definition. It also displays all the words they’ve tacked and their progress in the learning sequence for each one.

After the second repeat of a word there’s a gamified twist as the user must select the correct definition or synonym — depending on how far along in the learning sequence they are — from a multiple-choice list.

Picking the right answer means the learning proceeds to the next fibonacci interval. An incorrect answer moves the user back to the previous interval — meaning they must repeat that step, retightening (instead of expanding) the information-exposure period; hence adaptive space repetition.

It’s a simple and neat use of digital prompts to help make new words stick.

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The app also has a simple and neat user interface. It actually started as an email-only reminder system, says developer Jeremy Thomas, who made the tool for himself, wanting to expand his own vocabulary — and was (intentionally) the sole user for the first six months after it launched in 2019. (He was also behind an earlier (now discontinued) vocabulary app called Ink Paste.)

For now Yak Tack is a side/passion project so he can keep coding (and indulge his “entrepreneurial proclivities”, as he wordily puts it), his day job being head of product engineering at Gusto. But he sees business potential in bootstrapping the learning tool — and has incorporated it as an LLC.

“We have just over 500 users spread across the world (17 different timezones). We’re biggest in Japan, Germany, and the U.S.,” he tells TechCrunch.

“I’m funding it myself and have no plans to take on investment. I’ve learned to appreciate technology companies that have an actual business model underneath them,” he adds. “There’s an elegance to balancing growth and business fundamentals, and given the low cost of starting a SaaS business, I’m surprised more companies don’t bootstrap, frankly.”

The email-only version of Yak Tack still works (you send an email to [email protected] with the word you’d like to learn as the subject and the spaced repeats happen in the same sequence — but over email). But the mobile app is much more popular, per Thomas.

It is also (inevitably) more social, showing users words tacked by other users who tacked the same word as them — so there’s a bit of word discovery serendipity thrown in. However the user who will get the most out of Yak Tack is definitely the voracious and active reader who’s ingesting a lot of text elsewhere and taking the time to look up (and tack) new and unfamiliar words as they find them.

The app itself doesn’t do major lifting on the word discovery front — but it will serve up random encounters by showing you lists of latest tacks, most-tacked this month and words from any other users you follow. (There’s also a ‘last week’s most tacked words’ notification sent weekly.)

Taking a step back, one of the cruel paradoxes of the COVID-19 pandemic is that while it’s made education for kids harder, as schooling has often been forced to go remote, it’s given many stuck-at-home adults more time on their hands than usual to put their mind to learning new stuff — which explains why online language learning has seen an uplift over the past 12 months+.

And with the pandemic remaining the new dystopian ‘normal’ in most parts of the world, market conditions seem pretty conducive for a self-improvement tool like Yak Tack.

“We’ve seen a lot of good user growth during the pandemic, in large part because I think people are investing in themselves. I think that makes the timing right for an app like Yak Tack,” says Thomas.

Yak Tack is freemium, with free usage for five active tacks (and a queue system for any other words you add); or $5 a year for unlimited tacks and no queue.

“I figure the worldwide TAM [total addressable market] of English-learners is really big, and at that low price point Yak Tack is both accessible and is a huge business opportunity,” he adds.

Lingoda, an on-demand online language school with live instructors and Zoom classrooms, raises $67M

A startup out of Berlin that’s built and grown a successful online language learning platform based around live teachers and virtual classrooms is announcing some funding today to continue expanding its business.

Lingoda, which connects students who want to learn a language — currently English, Spanish, French or German — with native-speaking teachers who run thousands of 24/7 live, immersion classes across a range of language levels, has picked up $67 million (€57 million). CEO Michael Shangkuan said the funding will be used both to continue enhancing its tech platform — with more tools for teachers and asynchronous supplementary material — and to widen its footprint in markets further afield such as the U.S.

The company currently has some 70,000 students, 1,400 teachers and runs more than 450,000 classes each year covering some 2,000 lessons. Shangkuan said that its revenue run rate is at 10x that of a year ago, and its customer base in that time grew 200% with students across 200 countries, so it is not a stranger to scaling as it doubles down on the model.

“We want the whole world to be learning languages,” Shangkuan said. “That is our vision.”

The funding is coming from a single investor, Summit Parnters, and the valuation is not being disclosed.

Founded in 2015 by two brothers — Fabian and Felix Wunderlich (now respectively CFO and head of sales) — Lingoda had only raised around $15 million before now, a mark of the company being pretty capital efficient.

“We only run classes that are profitable,” said Shangkuan (who is from the US, New Jersey specifically) in an interview. That being said, he added, “We can’t answer if we are profitable, but we’re not hugely unprofitable.” The market for language learning globally is around $50 billion so it’s a big opportunity despite the crowds of competition.

A lot of the innovation in edtech in recent years has been focused around automated tools to help people learn better in virtual environments: technology built with scale, better analytics or knowledge acquisition in mind.

So it’s interesting to come across edtech startups that may be using some of these same tools — the whole of Lingoda is based on Zoom, which it uses to run all of its classes online, and it’s keen to bring more analytics and other tech into the equation to improve learning between lessons, to help teachers get a better sense of students’ engagement and progress during class, and to more — but are fundamentally also retaining one of the more traditional aspects of learning, humans teaching other humans.

This is very much by design, Shangkuan said. At first, the idea was to disrupt in-person language schools, but if the startup had ever considered how and if it would pivot to more automated classes and cut the teachers out of the equation, it decided that it wasn’t worth it.

Shangkuan — himself a language enthusiast who moved himself to Germany specifically to immerse himself in a new country and language, from where he then proceeded to look for a job — noted that feedback from its students showed a strong inclination and preference for human teachers, with 97% saying that language learning in the Lingoda format has been more effective for them than the wave of language apps (which include the likes of Duolingo, Memrise, Busuu, Babbel, Rosetta and many more).

“For me as an entrepreneur trying to provide a great product, that is the bellwether, and why we are focused on delivering on our original vision,” he said, “one in which it does take teachers and real quality experiences and being able to repeat that online.” Indeed, it’s not the only tech startup that’s identified this model: VIPKid out of China and a number of others have also based learning around live teachers.

There are a number of reasons for why human teaching may be more suitable for language acquisition — starting with the fact that language is a living knowledge and so learning to speak it requires a pretty fundamental level of engagement from the learner.

Added to that is the fact that the language is almost never spoken in life in the same way that it is in textbooks (or apps) so hearing from a range of people speaking the language, as you do with the Lingoda format, which is not focused on matching a student with a single instructor (there is no Peloton-style following around instructors here), works very well.

On the subject of the teachers, it’s an interesting format that taps a little into the concept of the gig economy, although it’s not the same as being employed as a delivery driver or cleaner.

Lingoda notes that teachers set their own schedules and call classes themselves, rather than being ordered into them. Students meanwhile pay for courses along a sliding scale depending on various factors like whether you opt for group or one-to-one classes, how frequently you use the service, and which language you are learning, with per-classes prices typically ranging between $6.75 and $14.30 depending on what you choose.

Students can request a teaching level if they want it: there is always a wide selection yet with dozens of levels between basic A1 and advanced C1 proficiency, if you don’t find what you want and order it, it can take between a day and a week for it to materialise, typically with 1-5 students per class. But in any case, a teacher needs to set the class herself or himself. This format makes it fall into more standardized language learning labor models.

“We closely mirror the business model of traditional (brick and mortar) in-person language schools, where teachers work part time in compliance with local laws and have the flexibility to schedule their own classes,” a spokesperson said. “The main difference is that our model brings in-person classes online, but we are still following the same local guidelines.”

After students complete a course, Lingoda provides them with a certification. In English, you can take a recognized Cambridge assessment to verify your proficiency.

Lingoda’s growth is coming at an interesting moment in the world of online education, which has been one of the big juggernauts of the last year. Schools shutting down in-person learning, people spending more time at home, and the need for many of us to feel like we are doing something at a time of so many restrictions have all driven people to spend time learning online have all driven edtech companies to expand, and the technology that’s being used for the purpose to continue evolving.

To be clear, Lingoda has been around for years and was not hatched out of pandemic conditions: many of the learners that it has attracted are those who might have otherwise attended an in-person language class run by one of the many smaller schools you might come across in a typical city (London has hundreds of them), learning because they are planning to relocate or study abroad, or because people have newly arrived in a country and need to learn the language to get by, or they have to learn it for work.

But what’s been interesting in this last year is how services created for one kind of environment have been taken up in our “new normal.” The classes that Lingoda offers become a promise of a moment when we will be able to visit more places again, and hopefully order coffees, argue about jaywalkers, and chat with strangers here and there a little more easily.

“The language learning market is increasingly shifting to online offerings that provide consumers with a more convenient, flexible and cost-effective way to improve their foreign language skills,” said Matthias Allgaier, MD at Summit Partners, in a statement. “We believe Lingoda has developed one of the most comprehensive and effective online language learning solutions globally and is positioned to benefit from the ongoing and accelerating trend of digitization in education. We are thrilled to partner with the entire Lingoda team, and we are excited about the future for this business.” Allgaier is joining Lingoda’s board with this round.