The mouse that guides children through ABCmouse, an educational app, is getting help from China’s most recognizable penguin to break into one of the world’s biggest market for English language learning.
Tencent—the Chinese internet conglomerate whose mascot is a penguin sporting a red scarf—is partnering with Age of Learning, the creator of the ABCmouse, to launch a new English learning app for the Chinese market.
Notching a deal with Tencent marks a huge leap for Age of Learning, best known in the U.S. product for its ABCmouse Early Learning Academy, an app that provides instructional games and exercises for young learners.
But it’s not the Glendale, Calif.-based company’s first foray into China. In 2012, Age of Learning began piloting a version of its ABCmouse program with Chinese schools; today these institutions number in the thousands. In 2015, it launched ABCmouse English Language Learning app in China, which ranked among the top-grossing app in Apple’s China app store for the kids’ category.
Up until now, Age of Learning kept its Chinese product development and marketing efforts close to its chest. But it has decided to let Tencent steer its consumer expansion effort in China.
“While the [Chinese] product we launched ourselves was successful, we always expected that in the long term we’d want to work with a major strategic partner,” says Zachary Katz, the company’s senior vice president of corporate development, in an interview with EdSurge.
Age of Learning aims to tap into Tencent’s vast distribution network across its social platforms. In China, few companies reach as many people as Tencent, whose mobile apps cover a vast array of business, entertainment, social media and payment services. Among the products it owns is WeChat, which is used by roughly 1 billion users every month for messaging, payment processing, hailing taxis and real estate transactions (among other services). Tencent also runs QQ, an instant messaging app with more than 783 million monthly active users.
Conversations between Age of Learning and Tencent began two years ago at the ASU+GSV Summit, a major U.S. education technology industry conference. Last summer the pair started work on creating new curriculum and content for the ABCmouse English Language Learning app. Designed for children between ages 3 to 8, this new ABCmouse program for China includes more than 5,000 games, songs, books and other interactive activities.
Under the partnership, Tencent will handle most of Age of Learning’s Chinese expansion efforts, including marketing, billing, product management and customer support. The app will be delivered primarily via QQ, the instant messaging platform that skews towards younger users. Tencent will also nudge users of the existing ABCmouse English Language Learning app to transition to this newer version on QQ. ABCmouse will also be integrated with WeChat, so that parents can pay for their child’s subscription and keep tabs on their progress as they work through the program.
“Part of what makes this partnership unique is the integration between ABCmouse and both QQ and WeChat, which will enable a range of frictionless activities,” says Katz, “from signing consumers up and authenticating their identities, to processing payment, to sharing students’ achievements and learning progress with parents and grandparents.”
And just as important, Tencent will share revenue from this business with Age of Learning.
According to estimates from Metaari, a Seattle-based market research firm, revenue from sales of digital English language products in Asia will reach $2.7 billion by 2022, with China accounting for more than half of the dollars.
In 2016, Age of Learning made headlines after raising $150 million from Iconiq Capital, a San Francisco-based investment firm with ties to Mark Zuckerberg, Reid Hoffman and other Silicon Valley technology magnates. That deal valued the company at $1 billion.
Age of Learning did not disclose its revenues or other financial details, only sharing that its apps were used by more than 6 million U.S. children across homes, schools and public libraries last year. For home use, the company charges parents a $10 per month subscription that covers up to three children. The ABCmouse program is free to use in libraries.
The company also began introducing ABCmouse in Japan last summer, although it is not publicly available yet. But if the Tencent partnership in China bears fruit, perhaps Age of Learning is on its way to justifying its unicorn status.
