Germany’s Babbel Adds Ex-Business Insider Executive in U.S. Push

(Bloomberg) -- German startup Babbel has hired a former Business Insider Inc. executive to spearhead a U.S. push, seeking to challenge Rosetta Stone Inc. and Berlitz Languages Inc. with its online language-learning service.

Julie Hansen, former chief operating officer of Business Insider, plans to invest in TV and social media marketing to promote Babbel’s courses, she said in an interview in Berlin, where the company is based. Hansen left Business Insider, a news website controlled by German publisher Axel Springer SE, last month.

Babbel has more than 100,000 U.S. subscribers and wants to expand that total, Hansen said, though she didn’t provide specific targets. The company may add to its current staff of 15 in New York, she said.

“There’s a huge opportunity in the U.S.,” as people are willing to pay for digital products and eager to learn, Hansen said, citing “the American preference for self-improvement, self-paced learning -- it’s the biggest market in the world for that stuff.”

Many language learners are turning away from books and CDs and switching to online services, including subscription-based offerings like Babbel or free, ad-financed apps developed by Duolingo Inc. The global cloud-based language learning market will grow about 6 percent a year to $6 billion by 2021, according to a report by Beige Market Intelligence.

Babbel, owned by Berlin-based Lesson Nine GmbH, says it has more than 1 million customers who pay $5 to $13 a month for courses developed by the company’s roughly 150 teachers and linguists. It has invested in technologies including chat bots and video and will this year start to cooperate with Cambridge English Language Assessment, a U.K.-based testing service, to provide online language certificates.

Started in 2007 by Chief Executive Officer Markus Witte and Chief Strategy Officer Thomas Holl, Babbel employs more than 450 people and has offices in Berlin and New York. Babbel says it’s cash-flow positive, declining to be more specific.

Investors in Lesson Nine include Scottish Equity Partners, Reed Elsevier Ventures and Nokia Growth Partners.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net. To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Eric Pfanner, Kim Robert McLaughlin