Speak raises $16M
Speak raises $16M
An OpenAI-backed Language Learning Platform
Public Data
Company: Speak
Press Release: Speak Announcement
Market (geography): US-based, with South Korea the focus of initial go-to-market
Market (industry verticals): Language Learning
Customer demographic: Adults
TAM estimate: $32.5 billion by 2029
Leadership Team: Connor Zwick, Andrew Hsu
Investors: Lachy Groom, Neo, GSV, OpenAI Startup Fund
Public business data:
Total funding is $63M.
Platform is live in 20 countries including Japan, Taiwan, Germany, France, Brazil, Mexico
100,000+ subscribers in South Korea.
OpenAI is an ongoing investor, Speak has gained early access to their technologies
ETCH Assessment
Bull case:
Language learning apps grabbed headlines in the EdTech industry over the past ~18 months. Preply recently raised a $70m Series C, Loora raised a $9.5m seed round, Duolingo grew their revenue by 47% from 2021 to 2022, and OpenAI led Speak’s $27m Series B round in November 2022.
Traditional methods of language learning are ineffective and expensive, drawing customers towards low-cost and convenient solutions. Language learning platforms, such as Duolingo and Babbel are great for casual, beginner-friendly use. Preply uses a live tutoring model with an AI assistant, and Busuu combines a learning platform with community feedback from native speakers. However, Speak posits that the best way to learn a language is through immersive use.
Speak is built for conversational practice with AI tutors to provide instant feedback on pronunciation, grammar, and style conventions. Rather than competing across the globe for users, Speak focused their product-market fit efforts in South Korea, where English language learning (ELL) is a fundamental requirement. Up to one-third of the total Korean private education spending (same link) is on English language education. Loora, a Tel Aviv-based startup, uses a similar audio AI language tutor model for the ELL market.
In addition to Speak’s narrow and deep product development approach, Speak differentiates itself through its partnership with OpenAI, who led the company’s Series B last November. While other companies in the space, including Duolingo, leverage OpenAI’s large language models, Speak believes the relationship between the two companies will help it stay at the forefront of AI and language learning.
Bear case:
Language learning is layered: reading, writing, and speaking are all a function of proficiency. While language learning platforms and apps do parts of this continuum really well, holistic language learning is notoriously difficult. Duolingo has focused on engaging their user base through gamification, notifications, and streaks, which has been great for supporting learners at the A1 (Basic User) to B2 (Independent User) proficiency levels. Speak hasn’t publicly announced the level of rigor their content aligns to, but since Speak is designed for conversation, the acquisition of new language knowledge or holistic language is an existential question.
The use of AI speech recognition is also being used across language platforms. Babbel, Busuu, and Rosetta Stone all use AI models to send the user feedback on their language pronunciation. Loora and Memrise are using AI to support everything from grammar to conversation skills. Preply is using AI to support tutors in content and lesson creation. Speak has a tough road ahead to maintain any lead they might have in the AI-for-language-learning race.
Finally, Speak’s narrow and deep product development strategy worked well in South Korea. However, this strategy also means the company will need to invest proportionately more in each new market it enters, which likely necessitates careful stepwise selection of those markets.
In the company’s words:
We wrote this post using the information publicly available to the ETCH team. If you are a member of the Speak leadership team, we welcome your feedback! We will update this post to include any commentary you feel appropriate in this section.
Email matt@etch.club for more information
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