AI reading coach startup Ello raises $15 million to boost children's literacy

Ello aims to eradicate child illiteracy through artificial intelligence and voice recognition.

Ello, an education start-up, announced today that it has secured $15 million in Series A funding. The money will be used for product development and to expand access to consumers. Ello's goal is to eliminate illiteracy among children using artificial intelligence and voice recognition technology.

An innovative AI-based approach

Ello is a subscription-based service for children in kindergarten through grade 3 that offers five books each month for 24.99 $. Parents download the Ello app, which determines the child's reading level through a series of questions. It also asks about interests such as animals, arts and crafts, sports and science. Reading experts then select books for each child. Additional children can be added to a family account for 12.49 $ per month per child. For the moment, the app is only available on tablets, but the start-up is also working on making it available on smartphones.

Ello listens to the child read aloud and analyzes his or her speech to correct pronunciation errors and missed words. Like a real teacher, the AI-based reading coach waits until the child has finished reading the page before using phonics-based strategies to teach critical reading skills. Children can also press the question mark icon if they need further help.

A personalized reading experience

Ello presents itself as a patient reading companion for children, even in moments of frustration, according to Dr. Elizabeth Adams, co-founder and Chief Experience Officer at Ello. Adams is a clinical psychologist specializing in child development and child behavior.

The application also features gamification mechanisms. As the child progresses each month, the app accumulates points that can be exchanged for toys and prizes.

Experienced founders

Ello was founded in 2019 by Adams and CEO Tom Sayer, former head of impact and adoption programs at Google for Education. The third co-founder is engineer Catalin Voss, a PhD candidate in artificial intelligence at Stanford University. Voss has also co-founded and sold two machine learning start-ups, DukaConnect and Sension.

A positive impact during the pandemic

In March 2020, Ello was launched through Y Combinator to help parents with their children's development. However, after speaking to hundreds of parents, the founders discovered that the pandemic had severely affected children's learning to read.

According to a 2021 Stanford University study, reading fluency among second- and third-graders in the U.S. was about 30% lower than would have been anticipated under normal circumstances.

Adams herself encountered this problem with her own daughter, who struggled to learn to read via Zoom. That's when she realized it was important to create something better.

A different approach from other EdTech companies

Ello stands out from other EdTech companies because it doesn't focus on assessment or show progress markers. A similar startup, Amira Learning, launched an AI-based reading assistant in 2018, but it's aimed specifically at teachers, not for home use like Ello.

"Ello doesn't test comprehension," Adams explains. "We really focus on getting children engaged and loving to read, as well as building their confidence... We offer children a learning-based, but also enjoyable, experience that doesn't feel like a test."

The start-up claims that its AI-based reading coach outperforms OpenAI's Whisper and Google Cloud's speech recognition API. In terms of traction, the company claims that 10,000 families use Ello and that children have read over 300,000 books on the app.

Promising future projects

In the long term, Ello plans to partner with schools and develop a product specifically designed for classrooms. The company is currently running pilot programs with some 30 schools, mainly in San Francisco and New York.

"Teachers' needs are different from parents' needs," explains Sayer. "Teachers really want assessment data. So we want to make sure we integrate them into the tool."

Although Sayer declines to give details of the product's roadmap, he does mention that the company is currently integrating generative AI into its application. In the near future, the company also plans to launch versions of Ello in other languages. Ello is currently testing a German version.

In addition to Goodwater Capital, the funding round was supported by Reed Hastings, Common Sense Growth, Homebrew and Ravensburger. This is in addition to existing funding led by Project A with participation from Y Combinator, WndrCo, Reach Capital, Visible Ventures and Khosla Ventures.