Language Learning Video Games

NEW STARTUPS

Startups that you can invest in with as little as $100 right now:

⛳️ Royal Albartross - luxury golf shoes, 100,000 sold. Trump’s gold course sells them. (LINK)

🏠 Nestment - productized house-hacking and now make $11,000 every time a home is sold (LINK)

🧠 BitterBrains - $1.8M in lifetime revenue from creating valuable resources for developers (LINK)

KICKSTARTER ROYALTY LAUNCHES ON WEFUNDER

The highest funded app in Kickstarter history is making its way over to Wefunder.

Fluyo is an immersive language-learning app set in an underwater environment with very squishable sea creatures.

Cuteness aside, the app did NUMBERS on Kickstarter, generating $1.2M in pre-sales from 8,083 backers.

Fluyo has 150,000+ members on their email waitlist while they work out final improvements to the app’s design. User feedback is being generated at lightning speed as the upstart claims to have 4,000 beta testers trying out the experience.

So how has Fluyo managed to drum up so much hype prior to launching their app?

Fluyo is getting a 100-meter headstart with the competition due to the popularity of one its founders - Ikenna.

Ikenna is well known on YouTube in the language-learning space. He’s amassed nearly 900,000 subscribers on his channel by showing off his ability to speak 7 languages.

Ikenna is tapping into his massive audience to drum up interest in Fluyo - across 10 videos specifically centered around Fluyo he’s received 500,000+ views.

GAMIFIED → VIDEO GAME

As someone who is learning a language myself, I’ve seen quite a few language-learning companies enter the space.

There are scores of language-learning apps, so what is Fluyo’s plan to stand out?

To understand what Fluyo is doing, I’ll reference a tactic of Napoleon.

Napoleon’s incredible success from the battlefield largely came from his usage of artillery. During his time, artillery was gaining popularity as a battleground weapon.

Generals were slowly increasing the number of artillery units, weaving them into brigades of soldiers.

Napoleon saw that artillery was giving armies an advantage and had a different approach to the weapon.

He went all in on artillery. Napoleon…

• redesigned the entire supply chain to prioritize artillery

• standardized the cannons so that crews could man any gun with no new training

• created entire battalions of cannons, rather than sprinkling them into brigades

• introduced lighter versions of artillery so that they could maneuver quickly on the battlefield

Fluyo may not be conquering Europe, but their strategy carries similarities with Napoleon’s game plan.

Many apps are gamifying their content - you can see this with Duolingo, Temu, Starbucks, etc.

It’s a strategy that works, and Fluyo is going all in on this trend. Their app isn’t gamified….it’s literally a game.

You can view a trailer here - players move through various challenges that are tied together with an overlying story.

Duolingo has propelled itself to the top of the language learning game in part by gamifying the experience to make it fun and build learning habits. Fluyo is running the same gameplan but turning the heat up a notch.

ORGANIC GROWTH LEVERS

A large part of Fluyo is built around community and social interactions - outside of the main game users can connect within lobbies of other users who are interested in learning the same language.

There also appear to be mini-games (similar to Mario Party) where users can go head-to-head to compete. Depending on how fun the mini-games are, they could entice users to pull their friends onto to the platform.

I’m a big fan of these social features - apps normally pay somewhere between $3-$10 on ads to acquire a user. If Fluyo can build a product that organically grows, all the money that would be spent on ads can then flow straight to the bottom line.

We’ve also seen that Ikenna can drive organic growth through his YouTube channel - if enough of these organic drivers can produce new users Fluyo will be in a strong position.

THE ARR STORY

One thing that troubled me about this particular startup is how lofty their projections were.

The app is set to launch in December, and the team expects to hit $2.5M in ARR mid-way through 2025. 

Fluyo has mentioned that their only revenue source will be premium memberships - any ad inventory on the app will be utilized to push people towards the premium tier.

I modeled some projections using what we know about Fluyo’s pricing model. The monthly price is $9.79 while the annual plan stands at $69.48.

Duolingo has around 8.6% of their users on a premium tier, with most opting for the annual plan.

If we apply this to Fluyo, the startup will need 418,390 total users to get roughly 35,982 paying members. Taking the annual plan dollar amount, that would get us to the $2.5M in ARR they’re targeting.

I’m not confident they can get this hot of a start out of the gate. 418,390 total users means that over 2,200+ learners would be signing up every single day. 

In my opinion, there’s too much competition to waltz in with those kind of numbers. There are a seemingly endless list of apps available on the App Store when typing in ‘language’.

In many cases, it’s okay if a startup comes in a little short of expectations (early on). With Fluyo, they priced the valuation in a way that requires the startup to hit these lofty goals.

Fluyo’s valuation on Wefunder stands at $25M - nearly double what I would consider paying for a pre-revenue, pre-launch product.

There is way too much risk for this to carry a $25M price tag.

• People may not like the product and either sign up or churn at a high rate

• Their conversion rate to premium could heavily trail Duolingo, who has spent years perfecting it

• Fluyo could be heavily over-estimating organic growth and be required to pay significantly to acquire users

On top of this, I have no idea what their costs look like - Fluyo hasn’t filed their Form C yet which would detail these figures. (not a fault of theirs, just can’t see the full picture of costs yet)

When speaking with one of the founders, I learned that the Fluyo team includes 14 full-time employees, as well as ~5 part time contractors. That’s roughly ~$1M in salary cost right off the bat.

Ideally, the majority of costs for this kind of business will be tied up in salaries. When the Form C is filed we’ll have to see if this is true.

Now there are reasons to expect a premium on Fluyo despite it being pre-product launch + pre-revenue.

1. The KickStarter backers verify that there is at le

   ast some sort of demand for an app like this

2. Ikenna’s YouTube channel gives them access to an owned audience that’s already interested in language-learning

However, I think these factors should cause a $10M → $15M valuation premium, not a $10M → $25M premium.

I’m going to pass on this investment opportunity - to me there are too many unproven variables to justify a $25M valuation.

Let me know what you think - are you swimming with Fluyo??