Babbel, the popular subscription-based language learning service, today announced that it has acquired Toucan, the well-funded language learning browser extension. Toucan, it turns out, wound down as a company earlier this year, though its service has remained online. None of Toucan’s co-founders or employees will join Babbel, which is only buying Toucan’s technology. Babbel will continue to run Toucan under the “Toucan by Babbel” moniker and integrate it into its ecosystem of apps and other language-learning resources. Babbel is also moving all of Toucan’s paid services into the extension’s free tier.
At its core, Toucan is a browser extension that allows learners to extend their vocabulary by replacing words on the websites you browse with their translations into the language you are trying to learn. It’s available for learning English, Spanish, French, Japanese, German, Korean, Portuguese, Italian, Arabic, Chinese (Mandarin), Hebrew and Hindi. Babbel itself doesn’t offer courses for quite a few of these languages, including Mandarin and Japanese, but it will continue to support these in Toucan — and potentially add more over time.
Web extensions are notoriously hard to monetize. On the Chrome Web Store, Toucan has over 300,000 downloads and a 4.7/5 rating, but even with that and a total of around $30 million funding (including a $20 million Series A round), the company clearly wasn’t able to become a profitable business.
Babbel has an advantage here, because it doesn’t need Toucan to be a profitable business. Instead, it can use it as a referral engine to bring more users into the Babbel ecosystem and to offer more value to its existing subscribers.
As Babbel’s U.S. CEO Julie Hansen told me, this will also give the company a freemium service to stay in touch with users who may not want to sign up for the paid Babbel service just yet. “Being a premium service, we are very focused on conversion, but we’re looking more and more into lifecycle marketing and how we create more of a relationship with users,” Hansen explained.
In the longer term, the company also plans to integrate the Babbel app and Toucan to help paying users extend their vocabulary with Toucan in a more targeted way.
Hansen told me that Babbel had about $270 million in revenue last year, up 32% from 2021, and that the company is “ahead of budget” again this year.
When it postponed its IPO in 2021 (due to the unfavorable market conditions at the time), Babbel CEO Arne Schepker already noted that the company would likely be on the lookout for potential acquisitions. Its previous acquisition of language travel service LingoVentura didn’t quite work out though. The COVID pandemic shut down that market and left Babbel no choice but to shut down that service, too.