Gradient Ventures, Google’s AI fund, is leading a $7 million investment in the Elsa English language learning application
Google’s Gradient Ventures, the research giant’s fund dedicated to artificial intelligence, is looking to Asia after leading a $7 million Series A for Elsa, a startup that operates an application for English-speaking students.
This is Gradient’s first transaction in Asia, involving existing investors, Monk’s Hill Ventures and SOSV. Elsa has now raised $12 million to date.
Elsa was founded in 2015 to help non-English speakers improve their accent and general speaking skills. Vu Van, CEO and half of the founding team, is a Vietnamese national who, although fluent in English, had difficulty being understood after moving to the United States to study and then work. In collaboration with Dr. Xavier Anguera, a speech recognition researcher and technical director of the startup, who heads the technical team based in Portugal, Van created Elsa to help people in the same situation.
“I was very good at grammar, reading and writing, but I realized that people had trouble understanding me because I had a very strong accent and my pronunciation was not correct,” Van, who is based in San Francisco but travels a lot, told TechCrunch in an interview. “It has an impact on confidence when you apply for a job or meet friends.”
“There are so many solutions for learning English, but they focus mainly on expanding vocabulary or grammar, very few deal with pronunciation,” she added.
Elsa uses speech recognition and artificial intelligence to rank a user’s spoken English against standard American English (and I thought we, the British, were the world standard…) by giving them a score at the end. This allows their progress to be monitored, while it focuses on pronunciation with a detailed examination of how a user speaks.
The service uses a freemium model that gives users full access to 1,000 courses for approximately $3 to $6 per month, depending on the length of the package they choose. This ranges from one month of access to 12 months. New content is added every week, Van said.
With this money in the bag, Elsa is targeting growth in a number of its most promising markets.
The service has users in more than 100 countries, but Vietnam is its largest market, with two million paying users. Partly because it is Van’s domestic market, Elsa has doubled its turnover in Vietnam with a local sales team and localized payments, including bank transfers and local portfolios.
This is the expansion plan for its next three target countries: Japan, Indonesia and India. Elsa has opened an office in Tokyo and plans to introduce more localized content for Japanese users. Similar efforts will occur in Indonesia and India, where the application sees strong engagement and downloads without any paid marketing efforts.
Elsa is also working to expand its content from English to other languages. Spanish is currently on the horizon and the company is already preparing the back-end technology to make it possible.
“We need to develop speech recognition technology to accurately recognize these languages. We have the infrastructure, but all we have to do is collect the voice data to form the model,” says Van.
Vu Van founded Elsa in 2015 with Dr. Xavier Anguera to help non-English speakers improve their accent and general speaking skills.
In addition to geographical expansion, Elsa also attacks schools and classrooms. Already, in Vietnam, he works with a handful of schools that have added the application to their classroom work. The company allows schools to upload their specific content or curriculum to Elsa to be integrated into the student’s homework or assessment. Teachers can see if a student has completed his or her oral homework and the application evaluates his or her efforts.
“We want to help these teachers help their students,” Van said. “Even with the best of intentions, they can’t learn to talk.”
The education effort model requires schools to pay a per-pupil licence fee, which Mr. Van says is subsidized, while downloading their content is free.
Gradient’s investment is a remarkable achievement for Elsa, but it will also allow the startup to tap into the company’s talent. That’s because Gradient operates a rotation program that allows Google employees to spend three to six months working on secondment portfolio start-ups. This process has not yet started for Elsa, but Van hopes to find an engineer who would otherwise be prohibitive for his company.
Gradient Ventures was founded in 2017 and this operation is the 18th in the fund, according to Crunchbase. Previous investments include Canvass Analytics and Test.ai.