Students who want to take Open English courses fill out a form on the company’s Website and are contacted by an Open English employee from either the Bogota call center (for Spanish speakers) or the Sao Paulo center (Portuguese). Once they sign up, they receive an activation code and instructions and can start classes immediately. Classes last 45 minutes and students can choose basic, intermediate or advanced levels. For beginning students, teachers are bilingual.
While Open English continues to expand in Latin America, the company plans to offer classes in the U.S. in the future, Andrés said.
Success did not arrive overnight for the company’s founders. Before setting up Open English, they ran a school that offered English courses in Venezuela to corporate executives with native English-speakers and very small classes. But they found that it was difficult to find native English-speaking teachers who were willing to relocate to Venezuela, so they developed the scalable idea of online courses where these teachers could work from virtually anywhere.
At first, they struggled to find capital to put together their project, quickly using up their own limited funds and obtaining a $10,000 bank loan six months into the project. They presented their business plan to venture capital and private investment firms, but it took about 18 months to obtain the first $400,000. Once potential investors saw that Open English had obtained funds, more money came in.
While Open English had received some money from angel investors, Flybridge Capital Partners, which focuses on providing seed money and early-stage technology investing, was the first institutional investor to take a major stake in the company, starting in the fall of 2012.
“We are very interested in online education and were aggressively exploring possibilities in this area,” said Jon Karlen, a general partner at Flybridge’s Boston, Mass. office. Flybridge saw an opportunity for Open English to appeal to the large, rising middle class in Latin America, Karlen added, “But what was really unique about the company was Andrés, who is an exceptional entrepreneur and became an outstanding CEO and leader.”
Currently the largest investor in Open English, Flybridge sees excellent growth opportunities for the company, in part because there is a huge market and broadband penetration is growing rapidly every year in the region. Flybridge has invested in Open English over three different rounds. Typically, the firm puts a total of $8 million to $12 million in their projects over the life of the investment, Karlen said.
As of today, the company has received more than $55 million from investors like Flybridge, Insight Venture Partners, Kaszek Ventures, LAM Ventures, Redpoint Ventures and angel investors. As the company’s operations staff expanded in Miami, the company needed new space and moved into a large, new offices in Coconut Grove in October of 2012.
After developing their system, videos, supplementary materials and software to support online courses, the three founders began promoting Open English in Venezuela five years ago.
They used — and today continue to use — advertising in Spanish and Portuguese that include clever and amusing Internet ads where Andrés and Nicolette have key roles. Andrés plays a student who speaks fluent English thanks to Open English and jokes with his friend who is taking traditional classes, spends hours in traffic to and from class and can hardly utter a phrase in English. Nicolette, who in real life is from Los Angeles, plays “Jenny from California,” one of the company’s teachers.