(Bloomberg) -- Speak, a startup using artificial intelligence to help people learn languages, is now worth $1 billion in a new funding round, doubling its valuation from six months ago.
The company is set to announce Tuesday that it has raised $78 million led by venture capital firm Accel. Existing investors including the OpenAI Startup Fund, Khosla Ventures and Y Combinator also participated. Speak has raised $162 million to date, the company said.
While competitors like Rosetta Stone and Duolingo Inc. have dominated the language learning market for years, Speak is betting that it can use AI to help make people more fluent in a new tongue. Instead of trying to gamify the learning process, the startup focuses on developing authentic speaking abilities.With Speak’s app, users can practice a new language by communicating verbally with an AI system. The San Francisco-based company’s speech recognition model adapts to users’ accents, allowing the app to offer real-time feedback.
“Historically, the only way to actually become fluent is to hire a human teacher or tutor,” co-founder and Chief Technology Officer Andrew Hsu said in an interview. “Until the past few years, the technology just hasn’t existed to build an AI or software-based conversational partner.”
Speak’s capital raise, its second this year, is a bright spot in the consumer AI space. While enterprise AI startups have raised $16.4 billion so far this year, consumer AI companies have brought in less than half of that, according to PitchBook.
“There’s a lot of companies chasing the promise of AI in the consumer space but there are few opportunities where that promise has actually translated into real revenue,” said Ben Quazzo, a partner at Accel who led the investment in Speak and is joining its board.
Speak has a subscription-based revenue model, with a premium service starting at $20 per month. Chief Executive Officer Connor Zwick said the company is approaching profitability and had revenue in “the eight figures.”While the consumer market has historically been its focus, Speak also has an enterprise offering that’s been gaining traction, Zwick said. “Many companies across the world pay for their employees to learn English and we’ve seen eight of the top 10 largest employers in Korea pick up Speak for Business,” he said. The startup plans to use the new funding to expand throughout Southeast Asia, Europe and the United States, and support most popular languages by the end of next year.
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