September 5, 2011 / 5:00 AM / 8 years ago

Abril Educacao enters Brazil language-learning market

* Abril Educacao, US online language site join forces

* Distance learning market estimated at $30 bln a year

* Livemocha is world’s No. 1 language learning community

By Guillermo Parra-Bernal

SAO PAULO, Sept 5 (Reuters) - Brazilian education services company Abril Educacao , seeking to tap the $30 billion a year distance language learning market in its home market, bought a stake in the world’s largest online English language learning community as demand for such services soars.

Sao Paulo-based Abril, which raised about $240 million in a July initial public offering, will own 5.9 percent of Livemocha, the Seattle, Washington-based Website, chief executives of both companies told Reuters in an interview.

Abril Educacao will task Livemocha with setting up an English learning platform for Brazil’s emerging middle class, which is demanding better formal education.

The partnership comes as the government seeks to better prepare Brazilians to welcome millions of visitors from overseas for the 2014 soccer World Cup and the 2016 Olympics.

The company is gradually morphing from a pure publisher into a diversified provider of educational solutions to schools, the government and private companies.

The Livemocha bet reflects growing optimism that learning communities could help sell more education content in Brazil.

“We will help our customers help students learn English with better levels of proficiency,” Abril Educacao CEO Manoel Amorim said in the interview.

The purchase of the Livemocha stake should help Abril implement innovative tools for online language courses, which have become a lucrative market niche as more than 25 million Brazilians joined the middle class over the past decade.

A tight job market is increasingly demanding a more skilled labor force, with better technical knowledge and proficiency in languages.

Some state governments in Brazil recently began subsidizing English-learning programs.

President Dilma Rousseff is considering the creation of a state scholarship program to pay for degrees in overseas universities for Brazilian students.

Brazil accounts for about 2.2 million, or about 25 percent, of Livemocha’s total customer base, said CEO Michael Schutzler. Neither executive gave estimates for demand and costumer base growth for the coming years.

“This is a vibrant opportunity to gain access” to the Brazilian market, he said.

Part of Livemocha’s potential for success is its online nature, Amorim said, a tool that most rivals in the local market — especially language-learning schools — do not have.

Amorim said Abril could eventually team up with specialized companies to implement systems for teaching English as another product that could be supplied to associate private and public schools. He declined to elaborate on the plan.

No bank participated in the deal, both executives said.

Shares of Abril Educacao jumped 3.7 percent to 17 reais on Friday. That level is below the 20 reais per share paid for investors in the July IPO. (Editing by Vinu Pilakkott)

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