Voxy, the New York City-based language learning startup that launched at TechCrunch Disrupt in 2010, is in the process of raising a Series A-2 round of equity financing. In a Form D filed with the SEC today, the startup indicated that it had already closed $2.3 million towards its $4 million goal from previous investors including ff Venture Capital, Contour Venture Partners, and Seavest Capital Partners, which all participated in Voxy’s Series A.
Founder and CEO Paul Gollash told Betabeat that Voxy plans on announcing two more “exciting” institutional investors in the coming weeks. The round was actually oversubscribed, “But we’ll limit the demand and allocate what’s available as best we can,” said Mr. Gollash, noting that he didn’t want to raise more capital than was necessary. Admirable restraint in these frothy times.
Voxy teaches English to Spanish and Portuguese speakers using what Mr. Gollash calls mobile immersive learning. Through partnerships with the Associated Press and Bloomberg, for example, its smartphone app highlights important phrases, offering audio pronunciation and translation and then tests users with reading comprehension and vocabulary quizzes. The app also allows for image recognition, “turning your photos into flash cards,” and a geo-located phrase book targeted to whether you’re in a coffee shop or hair salon.
“Voxy is attacking a huge market for language learning, which is something that’s not very conducive to learning in a classroom,” said Mr. Gollash. “Basically we have an experiential learning platform, where we can take content from your life–what you’d actually be interested in reading.” Its iPhone app is ranked the top-rated education app in 20 different countries, he said.
Sixty percent of consumers in the $80 billion language learning market are interested in learning English, said Mr. Gollash by way of explaining why 85 percent of Voxy’s users are outside the U.S. Twenty-five percent of Voxy’s user base is in Brazil, where the “rapidly growing middle class have an insatiable appetite for language education.” The fact that Voxy has been able to get that kind of adoption in Brazil with just one Brazilian employee in its Soho office is “a testament to how fluid the mobile app economy is,” he said. But Voxy has domestic users as well, including 15 percent from the U.S. Hispanic population.
Longterm, the company plans on offering other languages as well. However, the new financing will go towards hiring more engineers and accelerating product development.
Straphangers need only to look up at the Living Language ad campaign currently plastered all over the walls of the C train to get some sense of the competitiveness of the market, which Mr. Gollash called highly fragmented. Rosetta Stone, perhaps the best-known player, only reported revenues of $268 million last year
Naturally, Mr. Gollash sees that as an opportunity for Voxy. “It’s our goal to become the first billion dollar language learning company,” he said.
We’ll update you on those exciting new institutional investors once Mr. Gollash is ready to spill the beans.