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Lingo Media


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Three Canadian Start-Up Case Studies …

Three Canadian Start-Up Case Studies

Michael Kraft
Chairman & CEO, Lingo Media
October 28, 2010

Published in: Education, Technology
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  • Let me set the stage with a 2 minute video.
    Show Video
    Hold National Post – Here is one example how the media is covering the explosion of ELL in China & globally
    Now let me tell you about Lingo Media.
  • -Huge market opportunity for Lingo Media
    -The market in China is enormous along with India, Brazil and Russia BRIC has more than 2.85 Billion people
    -Why learn English?
    -to study abroad
    -especially to earn higher salaries
  • -Lingo Media turned our legacy text book publishing start-up into an innovative, high tech English language online solutions provider now in 11 countries providing online training and testing platforms
    Transition :
    -S2M: acquired Speak2Me in Taiwan in Fall 2007, the world’s 1st digital English language teacher using avatars and speech recognition, our web development ported the CD Rom’s to online platform and launched a Free-to-Consumer social learning service called
    -Our New Media Offering – …. Is the leading English Learning Website in China today with more than 1.5MM users

    Parlo-acquired and ELL Technolgies marketed under the Q Brand
    Parlo-acquired in Sept 2009
    Parlo is now Speak2Me with a Learning Management System
    -Our Online Training Service recently launched in China with plans to launch in India

    Q Group-acquired in May 2010
    Q Group is a leading ELL solution provider is distributed in 11 countries

    -We are on a roll now in China and now going global

    Legacy Business – 348 Titles and 350 Million Units and 12 Million + Students / Year
    -revenues limited b/c our deal is with China gov’t had limitations of how much one can earn but assures payment
  • Funding
    -We have to do whatever it takes to get capital
    -Our objective was to look for a strategic investor and we found that investor in Orascom Telecom who participates on the board and opens up biz dev opportunities for us
  • -Back in 2001, Lingo entered the China market to build a brand
    -Gov’t of Canada supported this aggressive market entry along with private placement financings ie. combination of public and private finance
    -Gov’t Programs are available and one cannot leave any stone unturned. The best thing about Gov’t Funding is no dilution for current shareholders

  • -Our strategy is buying undervalued assets at basement pricing
    -Speak2Me in Taiwan was the first acquisition in Oct 2007 in the online ELL Market focuses on Spoken English addressing the market need with the world’s first scalable English test practice platform
    -Growth in Users –we are now positioned to do a deal with a leading SNS to access massive reach
  • Add Parlo flash slide after
  • -LM had been a China focused company
    -Looked for an acquisition that could provide product expansion and geographic expansion
    -Here is a company that fit that model
    -Today we are fully integrated and taking advantage of all the synergies and getting ready to launch Q Group in China
    -With this acquisition, we are product ready and now transitioning into a sales and marketing company
  • Transcript

    • 1. L I N G O M E D I A C O R P O R AT I O N ( TS X - V: L M ) O C TO B E R 2 8 , 2 0 1 0 M AR S I N N O VAT I O N S U M M I T 2 0 1 0 Changing the Way the World Learns English
    • 2. Market Opportunity • 1.6 Billion English language learners (ELL) • Within 5 years- 2 Billion • China- largest ELL market in the world • English skills earn higher income (up to 72.5% more)** 100 200 400 700 900 950 1,000 1,300 2,000 - 500 1,000 1,500 2,000 2,500 1970 1975 1980 1985 1990 1995 2000 2005 2010 English Language Learners Worldwide (Millions) Source: British Council *Source: U.S. Census Bureau, International Data Base **Source: 2
    • 3. Corporate Structure Lingo Media Corporation 3 Publishing Social Learning Training
    • 4. Funding 4  Several Rounds of Financings  Strategic Investors  Most Recent $5 MM investment from Orascom Telecom  Other Sources Of Funding  Less Dilutive  Government Financing  CIDA Inc., Heritage Canada, OMDC and others  Issuance of Shares To Fund Acquisitions  Speak2Me  ELL Technologies
    • 5. Lingo Learning – Publishing • Partnership with People’s Education Press (PEP), China’s MOE Publisher • Investment in developing textbooks led to 348 original titles • 60% market share* • 11.7 Million students used PEP Primary English in 2009 • Co-Published 350 Million units through PEP Number of Units Sold (in Millions) 5 5.0 24.8 27.7 32.5 35.3 40.0 48.9 63.8 - 10.0 20.0 30.0 40.0 50.0 60.0 70.0 2001 2002 2003 2004 2005 2006 2007 2008 Number *Primary school market for ELL in China
    • 6. Speak2Me - Social Learning • Speak2Me acquired in October 2007 • Investment in online platform and portal for China market • Launched in China in December 2008 • Social network meets online learning • Free-to-Consumer: “Fun, Fast, and Free” • Avatar and state-of-the-art speech • recognition technology • 1,500,000 registered users and growing 6
    • 7. Speak2Me’s - Conversational Advertising How it works? • Advertisers embed brand in interactive campaigns with Speak2Me Lessons • Content developed around the brand and integrated into lesson • Users interacts with brand & product messaging • 10 X More effective than banners It is product placement taken to an entirely new level! 7
    • 8. Parlo - Training • Parlo acquired in Sept 2009 • Investment in fee-based training platform and LMS • Developed off-the-shelf and customized solutions • Clients • Universities & Language Centers • Corporations • Government • Focused on spoken English skills • Available 24/7 and scalable 8
    • 9. Parlo –Launch Client For Training Client • China Southern Airlines • 7,000 Flight Attendants • China Southern needs to compete on an international level • Required a customized solution Solution  Fully accessible platform for employees  Incorporated brand look and feel into lessons  Employees learn about and engage with the airline’s brand  Cost effective 9
    • 10. Parlo Assessment – Launch Client Client • Shanghai World Expo 2010 • Expected 70 million visitors • Challenge to recruit and process volunteer applications (1.5 million applicants applied) • Scalable platform solution to assess 80,000 volunteers in English Solution  Standardized test platform for pre- screening  Incorporated brand look and feel into lessons  Volunteers learn about and engage with the brand  Developed for high volume assessment 10
    • 11. ELL Technologies (Q Group) - Training 11  Acquired in May 2010  Online language training company  Distributors in 11 markets  Includes reading comprehension, writing skills and SCORM compliant  Over 1,700 hours of learning through online, CD-ROMs and blended learning
    • 12. Growth Strategy  Acquire undervalued assets in line with operational strategy  Capitalize on R & D from acquisitions  Aggressive sales and marketing in China & India  Expansion of distribution partners in other markets  Launching new English Online Assessment Service and Mobile Applications 12
    • 13. Contact Us Corporate Headquarters Lingo Media Corporation (TSX-V: LM) Michael Kraft, President & CEO 151 Bloor Street West, Suite 703 Tel (416) 927-7000 ext. 23 Toronto, Ontario Fax (416) 927-1222 Canada M5S 1S4 13
    • 14. New Product Development - EAP 14 Corporations Job Seeking Websites Job Applicants Parlo Internet Based Test English Qualified Applicants Individual Applicants Parlo Internet Based Test English Qualified Applicants Distributor Retailer End User End User Become qualified by taking the Parlo Test Parlo Assessment