Speakaboos is an award-winning multilingual interactive storybook subscription service that facilitates early childhood literacy and language learning. But the real story is the team they’ve assembled, and their extensive experience in the children’s education space, including time spent with Nick Jr., PBS Kids, Scholastic, and HIT Entertainment.
The Chief Content Officer is Dr. Alice Wilder, who is known best as co-producer and head of testing for Blue’s Clues, and co-creator of Super Why.
That’ll help inspire children to read more. And they do!
It certainly helped when it came to closing their Series B round.
CEO and cofounder Neal Shenoy talks about the mobile platform that has caught on with children – as well as parents and educators – all over the globe.
Who were your investors?
Our Series B round was led by Rick Segal, Managing Partner of ReThink Education (whom we believe is the best VC in ed tech) and The Al Sayegh Group (strategic operating partners for Berlitz and LG), alongside new participation from an education industry syndicate that includes Deborah Quazzo, Co-Founder of GSV Advisors; Helena Wong, former President of International for Rosetta Stone; and Scott Booth, Founder and Special Advisor, Lead Edge Capital.
Existing investors in Speakaboos include venture funds such as Advancit Capital, strategic education investors such as the Kyowon Group (the largest education company in Korea) and industry executives such as Gerald Hughes, former President & COO of Houghton Mifflin Harcourt.
Tell us about your product.
Speakaboos is an award-winning mobile education platform for early childhood literacy and language learning. Our mission is to inspire children to read (and read more!) and spark a lifelong love of learning.
Speakaboos is a reading service featuring interactive books produced in partnership with major publishers such as Penguin, Scholastic, The Jim Henson Company and HIT Entertainment and designed by educators – we’re used by tens of thousands of teachers and children in classrooms and homes worldwide.
We’ve been chosen by industry leaders and upstarts such as the Kyowon Group (largest education company in Korea), Fuhu (fastest growing kids tablet maker in the U.S.), McGraw Hill (one of the largest school distributors in the U.S.) and Fingerprint Digital (global partner to Samsung) to deliver our literacy service to their millions of customers.
How is it different?
Speakaboos challenges the traditional app model for children’s books:
a) we provide curation for parents and educators within a child-first design that is used by children as young as two years old to find books they love,
b) we provide a large and growing catalog of classic and popular children’s books that are delivered in a high engagement, interactive format that features multiple reading modes for young children, read-along highlighted text, animation and interactivity all of which supports reading comprehension,
c) we work across all devices, including desktops in schools & libraries, and
d) we support a pricing model that provides access to hundreds of books for the cost of a single app.
Speakaboos’ proprietary learning model is highly effective. Developed by Dr. Alice Wilder, Chief Content Officer, and Head of Research & Testing for Blue’s Clues and SuperWHY!, children read over 45 storybooks per month on Speakaboos, spending 20+ minutes per session reading and develop strong literacy skills, including comprehension, fluency and vocabulary acquisition.
Speakaboos’ flexible content licensing, product and revenue model also enables us to secure profound distribution – the most important determinant of success in the education technology market – across distributors such as Nabi (Kids OEM), Samsung (Android OEM), McGraw-Hill (school platform), Overdrive (library platform), Fingerprint Digital (subscription platform), Kyowon (largest education company in Korea) and Donor’s Choose (education marketplace).
What market you are targeting and how big is it?
Our focus is on serving young children – ages 2 to 7 years old, for literacy – and ages 6 – 10 years old for language learning in schools, libraries and homes globally. There is currently $15BN spent on educational software and supporting materials in this market annually.
What’s your business model?
Speakaboos sells subscriptions to both parents at home and educators in schools and libraries. Our subscription currently costs $4.99 / month, or $49.99 / year for at-home usage and is priced on a per student basis for educational institutions.
What are the most popular topics that engage young readers?
Our catalog and service is modeled on the theory of connected learning: children learn (and want to learn) more when presented with high interest topics and characters that engage them. Speakaboos serves a wide range of children with varying levels of reading fluency and so we see interest in original stories as varied as ABCs, Animals, Bugs, Cars, Dinosaurs, Everyday Life, Fairy Tales, Monsters, Princesses, Sports and Robots to interest in popular characters such as Thomas the Train and Sid the Science Kid.
What was the funding process like?
We were very fortunate to have a high level of participation from existing investors: in all, over 60% of the round was funded by existing investors and nearly every new investor was sourced by an existing investor or advisor. We were also fortunate to add several new venture funds, strategics and industry executives who truly understand the education market, distribution and international markets.
What are the biggest challenges that you faced while raising capital?
Education has only recently received a high level of attention from institutional and strategic investors and most investors like to invest in things that they understand and can motivate to success. We spent time with a number of investors that were genuinely interested in education and complimentary of Speakaboos, the team, our traction and the market opportunity but found it hard to “pull the trigger.” Our consolation is that these conversations serve as a nice foundation for a potential growth equity round in the future as we continue to grow the business (and correspondingly, our valuation).
What factors about your business led your investors to write the check?
There are several things that each of our investors shared in their view of the business. First, they were convinced of the market opportunity in early childhood education globally. Second, they liked the team and appreciated our collective track record in education, publishing and digital media. Third, they loved the product (and most often were committed users of it with their own children). Fourth, they believed that we had a very strong go-to-market plan for our product, marketing and distribution which was proven by our partnerships with major publishers and education companies.
What are the milestones you plan to achieve in the next six months?
We have a very clear view of our milestones over the next 6 – 9 months and it simply comes down to scaling our subscribers and revenues. To do that, we have to accomplish three things: introduce a successful Speakaboos service across all major platforms (iOS, Android, Web, Interactive TV); launch all of our major consumer, school and library distribution partnerships and activate our marketing plan. We’ve
seen triple digit growth in subscribers and revenues over the past six months and expect that to continue at an even steeper rate.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Whether you have a lot of money or a little money (and we’ve certainly been in both places), your execution playbook should not change: have a clear understanding of the milestones you must accomplish to grow as a business and attract more resources (in the form of revenues and capital), focus your team on driving those milestones on a day-to-day basis and engage your extended family of Board Members, Investors and Advisors early and often to help drive results and resourcing.
Where do you see the company going now over the near term?
We have a simple mission: inspire children to read and spark a lifelong love of learning. Every day our goal is to serve and impact more and more children in homes, schools and libraries across the world and in doing so scale the type of impact we see everyday and correspondingly grow the value of our business.
We’re going to dedicate every hour of every day that we work on Speakaboos to furthering this mission.
What’s your favorite NYC bar, when it comes to partaking in more adult beverages?
So after a Board Meeting (kidding) I love going to Pouring Ribbons in Alphabet City. Their menu plots drinks on a Cartesian grid with “refreshing,” “spiritous,” comforting” and “adventurous” as axes (just geeky enough for your startup CEO).