“We not only want to be the language-learning leader, but the overall leader in online learning.” Steve Swad, CEO Rosetta Stone
Rosetta Stone just put another present under its Christmas tree. After announcing the acquisition of French competitor TellMeMore last week, Rosetta Stone found itself yet another piece of the puzzle for its planned transformation from language into learning company.
The Arlington based company agreed to acquire Vivity Labs Inc., a Vancouver based startup that specializes in brain training games and mobile applications for $12 million in cash. Though somewhat controversial from a scientific point of view, brain training applications and games are a thriving vertical.
Lumosity, one of the market leaders just announced in November that its brain training software now has over 50 million users worldwide. If this is part of the reason to acquire Vivity Labs, who knows, but it surely helps to explain another $12 million acquisition to the shareholders. Rosetta Stone also quotes a study from research firm SharpBrains in the press release.
[…] the market for brain health software grew from $295 million in annual revenues in 2009 to more than $480 million at the end of last year. Experts estimate that the market will exceed $3 billion by 2020.
As I mentioned above, this is another acquisition along the lines of turning Rosetta Stone into a learning provider yet it is also very close to its core in language learning. If you take a look at flashcard apps or younger competitors like busuu or babbel.com algorithms that help you learn vocabulary faster and more efficiently play a key part in their offerings.
Hence adding brain training aspects to Rosetta Stone, Livemocha or TellMeMore products down the line would make a lot of sense.
Vivity Labs flagship application “Fit Brains Trainer” has been downloaded close to 5 million times. For comparison, the famous Dr. Kawashima’s Brain Age series on the Nintendo has sold 19 million copies worldwide until March 31st 2013 since its start in May 2005. Clearly another sign of the power of distribution on mobile platforms and the decline of dedicated handheld gaming devices.
Fit Brains Trainer is free to download and generates revenue through in-app purchases as most apps do today. Prices range from $4.99 to $49.99 in the iTunes Store.