Open English: Among the highest growth potential companies in digital consumer business in Latam

Open English: High potential online based English-language shcool is among the highest growth potential consumer companies in Latin America

If you are a native of Latin America, or at least spent a couple of weeks there, you have probably heard about Open English, EasyTaxi, Linio or Despegar.com. All of these share the condition of being among the top-10 companies regarding growth potential in the region.

In particular, I will mention a couple of facts I believe that explain why Open English, an online English-language school (see this quick intro video), deserves to be within the “winners” in these conversations about Digital Innovation & Transformation.

Open English, founded by Andres Moreno (Venezuela) was launched in 2008 and since then has been growing exponentially. The company has raised capital for more than $120 million and now is the leading language school in Latam. In fact, it has a base of 250k+ students (70k+ enrolled permanently in courses) from 40 different countries. The company is valued $350+ million.

In addition to the fact that is much cheaper than presential learning models, Open English creates significant value combining at least three factors:

  • English-native teachers: Recruited mainly from the US, the teachers have multiple backgrounds and have to pass different checks from the company (not everyone can be a teacher!). This strategy does not only give a holistic English experience to the student but also, enables the company to ensure the “teacher supply” with a massive pool of skilled people.
  • Live online classes: The student participates in real classes. Using a web-based platform, the class is executed via video-conference system, enabling direct communication between teacher and student. Also, given the massive pool of teachers, the student is able to choose classes 24/7, giving him/her great schedule flexibility
  • Friendly learning platform: Each student can track his/her progress through an online platform. With this platform, live classes are complemented with videos, games and interactive exercises, making enjoyable for the student the experience of learning.

The is able to capture the value from two main sources. First, every person can sign up and they will receive a call from a sales representative, who will give “advice” regarding an optimal learning plan (For example, a student can purchase a plan for specific needs) paying a fixed fee for it. Given that the business model relies on scale, the company then captures the margin between the course and its marginal cost.
Second, Open English has a sales force that targets specific organizations, negotiating with them discounted group and personalized packages.

Open English has been able to build and impressive customer base in Latam. Moreover, they have announced recently that they would strong invest in the USA in order to capture opportunities within the Hispanic sector, which, it not only the largest minority in the USA but also a group who is getting more purchasing power.

I believe Open English is a winner, at least until now. They have been very smart leveraging digital features and providing substantial value to people that wants to learn English. I am not sure how effective this platform is to teach the language, especially considering its negative reviews. But all seems to show that much more than the learning itself, is the interaction, flexibility, and holistic experience that OpenEnglish is providing to the customers.

 

 

 

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Student comments on Open English: Among the highest growth potential companies in digital consumer business in Latam

  1. Thank you for your sharing.

    It does seem like they serve as a disruption to the traditional classroom type of English learning given its convenience and better tracking / feedback system. However, what is your thought in why they are winning within the online English learning sector? It does seem that other learning platform also consider using native teacher and live classes. Do you think that they particularly stand out because of other reasons such as fundraising or sales strategy? Or you think that they excel other players in terms of their technological platform?’

  2. Very interesting post! OpenEnglish managed to come from nothing to a well known company in LATAM based on creative marketing. In the first TV ads you could see 2 guys (since they were low on budget the founder was one of them) doing a really ridiculous sketch. People remembered OpenEnglish just because of this ridiculous ads! They got viral and people watched them just because they were funny.
    This was all that they needed. Just being remembered by people, so when someone wanted to learn english, OpenEnglish will be a name that could come up easily. By being a top of mind company, they reach the amazing numbers you show!

  3. Interesting article Mati… Casually, Andres Moreno (Founder of Open English) was my college classmate before he dropped out. I remember he was raising seed money from friends and family at a minimum investment of $20,000… Sad I didn’t invest! hahaha

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