Our revenue has grown 918% in four years from 2013 to 2017. We also have an exceptionally high repurchase rate. In Finland, the Customer Lifetime Value (CLV) of our web subscribers is 105 euros, with the CLV of mobile users approaching the same level. According to our customer research, 98% of high school seniors and 96% of other users recommend WordDive, and recommendation-based sales form a significant amount of our total sales.
Our strategy is to concentrate on markets that spend a significant amount of money on digital language learning. Our growth markets in 2018 are Sweden and Germany, with China and the USA joining them from 2019 onward.
The growth of the field is driven by Chinese consumers, who benefit immeasurably from fluent English skills in the increasingly tough competition for good schools and jobs. China is clearly the largest market for digital language learning, approaching a billion euros in our estimate.
Last year, we developed a prototype of an AI-based innovation that can help the learner to speak English in only a few dozen hours. Our prototype is already 93% accurate in recognising pronunciation errors that affect understandability. With the aid of artificial intelligence, we can give each user personalised instructions for correcting the errors. The prototype’s Net Promoter Score of 64 anticipates strong recommendation-based growth.
With this innovation, WordDive is the first mover on the digital language learning market capable of providing a turnkey language skills solution. Our next goal is to increase the revenue 900% in three years, in other words, to exceed 14 million euros in revenue in 2020. By 2025, we aim to hold 5% of the digital language learning market, which equals a revenue of roughly 400 million euros.
At the moment, there are plenty of applications on the market for learning vocabulary and basic grammar. The number and popularity of these applications shows how great the need for digital language learning is. However, WordDive’s new, AI-based solution takes digital language learning to a whole new level. It will quickly give the user the ability to speak in a foreign language in different work, studying and everyday life situations.
Based on the prototype, the following skills are estimated to be gained in approximately 75 hours:
- Vocabulary and grammar, 45 hours (existing app)
- Pronunciation, 20 hours (Speak with AI innovation)
- Word stress in speech, 10 hours (Speak with AI innovation)
We believe that personalised teaching of speaking skills will give WordDive a significant advantage on the global digital language learning market. The essential thing is to be successful on the most competitive markets, because the forerunners on those markets are likely in the long run to take over the markets in the rest of the world as well.
WordDive is a scalable, fully digital service, which means that as revenue increases, a larger percentage of income can be used for customer acquisition. This, if successful, will further accelerate growth. Our primary means of customer acquisition is paid advertising, which can be scaled rapidly when it is found to be profitable.
During the last two years, we have been investing systematically in developing our in-house marketing know-how. This enables competitive customer acquisition in Europe and in the USA mostly without third party assistance. In China, however, we are preparing to launch with a local partner Zes Mob Ltd.