Many startups are being created in Russia, but not all of them are successful on the global market.
Buddy.ai – this is exactly the exception to the rule. This service for learning English, created by two friends from Krasnoyarsk, is now a leader in its niche, and it recently raised $11 million.
Let’s figure out what’s so unique about Buddy.ai and why investors are investing in it.
Briefly:
Who created the company
Dmitry Plotnikov
Buddy.ai was founded in 2017 by Ivan Kryukov and Dmitry Plotnikov. Both grew up in Krasnoyarsk and met there while studying at the Siberian Federal University.
The friends launched their first joint business in 2007. This was Chocavo website with a poster of local events and ticket sales. It showed little profit and quickly closed.
Subsequently, they worked together at Cubic AI, which developed smart speakers. In 2016, Cubic AI was sold to Yandex, and based on its developments, Yandex Station was created.
Ivan Kryukov
Kryukov and Plotnikov left Cubic AI after the sale to Yandex and decided to found their own company, Buddy.ai. Buddy.ai was originally conceived as a voice assistant for children that could manage a child’s screen time and recommend content. The company negotiated about integrating Buddy.ai into Samsung devices, but it never came to fruition.
Then Buddy.ai refocused on teaching children English. Kryukov moved to the United States in 2014 while working at Cubic AI. By the time Buddy.ai was launched, his daughter had started kindergarten, but for a long time she could not master the English language. Plotnikov’s children had a similar problem. Actually, this is how the idea of creating an application for teaching children English came about.
How does Buddy.ai work?
Buddy.ai does not replace classical tutors, but helps you learn words and improve pronunciation. The application shows various pictures, and the child must say in his voice what is depicted on them.
The app features a virtual avatar, Buddy, that changes as you progress in learning English. In addition, he can talk himself and visually respond to the child’s answers.
The percentage of errors of the Buddy.ai speech recognition model (BSR) in comparison with top analogues
Compared to similar applications Buddy.ai has three key differences:
︎ Own child speech recognition system. According to Kryukov, it works better than Apple and Google. She also learns different children’s accents.
︎ The application is fully compliant with the Children’s Online Privacy Protection Regulation (COPPA). This is necessary for training the speech recognition system on children’s data.
︎ Buddy’s avatar is controlled automatically based on conversation context, making it more flexible for learning
The app currently only allows you to learn English, but its potential doesn’t stop there.
How does work work at Buddy.ai?
From the very beginning, the startup operated from two offices: in Moscow and California. This was due to the fact that Plotnikov lived in Russia, and Kryukov in the USA.
After February 2022, the Moscow office had to be closed, and all the developers, together with Plotnikov, moved to Montenegro, where they still work.
The Buddy.ai team consists of approximately 20 people. In 2020, Buddy.ai actually absorbed a similar company, Edwin, which was created by the former head of the LinguaLeo foreign language learning service Dmitry Stavisky.
How much does Buddy.ai earn?
The founders initially developed a subscription app. A small portion of the content is available for free trial, but further learning requires a subscription. In the Russian App Store the following prices:
︎ Week: 899 rubles
︎ Month: 999-1190 rubles
︎ Six months: 2890 rubles
︎ Year: 5590 rubles
At the end of 2022, about 15% of new users had been paying for a subscription for more than a year.
At the end of 2023, Buddy.ai was downloaded more than 22 million times worldwide, and in 2024, the number of downloads exceeded 50 million. The startup’s revenue, according to its own data, is growing by 93% year on year. More than 20 million children use the service every year. About half live in Latin American countries.
The company has not yet reached profitability. Almost all the proceeds go to salaries and development of the service, including the development of new functions.
It is interesting that despite Russian roots, the share of Russian users does not exceed 10%. Until February 2022, half of the startup’s revenue was provided by users from Russia and Ukraine. But after Apple and Google banned bank payments, they had to quickly find a new source of income.
The company expanded into other markets, and the Latin American market was very successful. Buddy.ai is even used in some Brazilian schools. As for Russian-speaking users, now they are mainly emigrants and their children.
Over several years, Buddy.ai regularly raised funds from investors. At the start, Konstantin Senchenko, a Krasnoyarsk businessman and politician who was one of the first investors in Cubic AI, invested $100 thousand in the company.
In November 2024 Buddy.ai attracted $11 million from BITKRAFT Ventures, One Way Ventures, J Ventures and Point72 Ventures, among others. The valuation amount is not disclosed.
According to Kryukov, the company negotiated with 186 investors to close this round.
Future plans
Buddy.ai has firmly established itself in its niche and plans to develop further in it. One of the new directions is entering Asian markets.
The company also wants to develop its gaming division to make the app as fun as top games.
Source: www.iphones.ru
