“The acquisition of Tell Me More is an exciting way to close out what has been a transformative year for Rosetta Stone.” Steve Swad, President and CEO of Rosetta Stone
Indeed. It seems that this year ends with a bang for the language learning market as Rosetta Stone announced the acquisition of its French competitor Tell Me More for $28 million.
Tell Me More, formerly Auralog, was founded in 1987 and established itself as leading language learning software, not only in France. If you happen to visit a French or German bookstore you will most likely find their boxed language courses in the shelves and not the yellow ones of Rosetta Stone.
With this acquisition Rosetta Stone wants to strengthen its footprint in Europe and China in the consumer space as well as globally in the B2B sector. 85%, or $25 million, of Tell Me More’s revenue comes from the corporate and higher education space.
This also means that the acquisition price is essentially equal to one year of revenue which doesn’t seem that much for a 25 year old company. It’s not exactly a fire sale like in the case of Livemocha but also shows that there was probably not much room left to grow for Tell Me More and that joining forces with Rosetta Stone made more sense.
“Tell Me More is an exceptional fit for Rosetta Stone. This acquisition will immediately strengthen our growing Enterprise & Education business with a complementary suite of products and services that enhances our offering around the world.”
says Swad in the press release.
And this latest acquisition does not seem to be the last on Rosetta Stone’s wishlist.
“We will also be significantly building up our European operations and acquiring an established operation in China, where we are not present today.”
Rosetta Stone also will keep the Tell Me More brand like they did with Livemocha to profit from the cross-marketing. One could say that Rosetta Stone is turning into a P&G of language learning.
“In addition we are going to introduce Tell Me More’s products into some of our Consumer markets, giving our customers even greater choice.”
On the other hand, Rosetta Stone plans to fully integrate Tell Me More’s sales force and operations team.
Besides further consolidating the language learning market through this acquisition, Rosetta Stone also gets a beach head into Europe that for now is a stronghold of its up and coming competitors busuu and babbel.com.
Sure, the acquisition of Tell Me More is more about corporate and higher education whereas busuu and babbel.com are clearly aimed towards a consumer audience but in order to maintain their growth both of them will sooner or later have to move into the B2B space as well.
One thing is for sure, 2014 will be another exciting year for the language learning sector.