Babbel puts planned IPO on hold

The Berlin language learning company Babbel has canceled its IPO planned for Friday. As Babble announced on Tuesday, the “currently unfavorable market conditions” were the cause of the decision. The IPO itself has only been postponed, but not canceled. In the medium term, Babbel is still aiming for an IPO on the Frankfurt Stock Exchange. However, Babbel does not give a specific date or period for this.

The IPO, which has now been canceled, comes as a bit of a surprise. In mid-September, CEO Arne Schepker announced that the time for the IPO was just the right time and that he was satisfied with the reaction of investors. Well, one day before the end of the subscription period, that should no longer be the case. Obviously, the uncertainty on the stock exchanges is too high for those involved. The DAX has stabilized, but it remains unclear how the crisis surrounding the Chinese real estate company Evergrande will affect the share price. For the shareholders, including the company’s founders Markus Witte and Lorenz Heine, this could mean losses. Both hold about 13 percent of the shares in Babbel and are among the largest shareholders.

Everything started well: Babbel started in mid-September with a stock market valuation of up to 1.26 billion euros. The company estimated the share value at EUR 24 to EUR 28 per share. Approximately 190 million euros should flow into the cash register. Above all, Babbel wanted to drive expansion into other markets and further expand the US business, Babbel said. In addition, the language learning offer should be improved and expanded.

During the Corona crisis, Babbel achieved sales of around 147 million euros in 2020 due to higher demand for online language learning courses, and around 83 million euros in the first half of 2021, a significant increase of 18 percent. Last year, Babbel was not profitable with a loss of 23.6 million euros, as the stock market prospectus shows.


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