Duolingo IPO: Everything you need to know about Duolingo
Ben Lobel July 28, 2021 6:50 PM
Duolingo has emerged as a serious contender in the edtech space, having raised substantial funding and reached hundreds of millions of people with its free language learning resources. Here’s our rundown of the business following the 2021 Duolingo IPO.
Duolingo IPO: When was the Duolingo IPO?
The Duolingo IPO occurred on the Nasdaq on July 28 2021 under the ticker DUOL. The company raised $521 million through the sale of 5.1 million shares at a starting price of $141.40 a share. This meant a company valuation of nearly $5 billion as shares closed.
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How much is Duolingo worth?
Duolingo is worth some $5 billion following its Nasdaq IPO.
In November 2020, the company was worth some $2.4 billion, based on its fundraising round that month of $35 million.
What does Duolingo do?
Duolingo is a Pittsburgh-based language learning company offering a website, mobile app and assessment platform that assist users in learning up to 40 languages.
The company was started in 2011 by Guatemalan computer science professor Luis von Ahn together with Severin Hacker, one of his postgraduate students. Following the sale of his previous bot-detection company CAPTCHA to Google, von Ahn decided to proceed with a language learning tool in an attempt to solve the problem of expensive language courses for those in developing countries.
After raising initial finance through a government grant, von Ahn secured a $3.3 million Series A round of funding, to which film star Ashton Kutcher contributed. The raise was put towards developing a beta and the platform proper launched in 2012, having grown a waiting list of 500,000 users during the time in beta, largely through word of mouth alone.
After raising a Series B round of $15 million in 2012, the company released an iOS app, followed by an Android app in 2013, and was able to grow its userbase significantly over the following years, with funding totalling more than $183 million pre-IPO. Some 10 million people downloaded the app in the space of a year.
As of July 2021, Duolingo has some 300 million global users of its technology, more than 1,000 global employees, and in excess of $161 million in revenues, around double the figure for the previous year.
Who are Duolingo’s competitors?
Duolingo’s main competitors are the likes of Rosetta Stone, Babbel, and Busuu. Each of these companies, and others, offers their own take on language learning, from Duolingo being suited to users who want to brush up on basic skills to Babbel’s focus on language mastery, to Busuu concentrating more on business customers. Some products are free, some offer paid subscriptions only, and others take a mixed approach, like Duolingo.
How does Duolingo make money?
Duolingo makes money through its ad-free premium subscription product, for which it charges $12.99 a month. This service offers perks such as unlimited skill tests, access to a progress quiz, and the ability to download and use lessons offline. The company also runs display ads for those who don’t pay for the service and sells language proficiency tests.
Moving forward, potential investors will be keen to establish the additional revenue models the company has up its sleeve, as only 3% of Duolingo’s users pay for the premium service, a figure that could prove to be unsustainable moving forward.
What is Duolingo's business strategy?
Duolingo’s business strategy was always focused on finding a way to monetise a service that was intended to be free and accessible. The model was initially based on providing translation services to businesses that were provided by the platform’s own users, with the ethos of ‘learning a new language while translating the web’. But while Duolingo was able to attract organisations such as BuzzFeed and CNN to its user-generated translations, the company moved away from this strategy due to its complexity and resource-heavy demands.
Duolingo then moved into the premium subscription space, with those using the free service seeing ads across the platform, from across the dashboard to within lessons. The company also offered an affordable language test for users to gauge their progress.
A key strategy move since the beginning of the company has been crowdsourcing volunteers, who have written and translated a bulk of material for the company during the days of selling translations to companies. Today, though, crowdsourced labour for the business takes the form of volunteer forum moderators and contributors who help with course creation.
Post listing, the company’s strategy will likely be working on launching a language proficiency standard to set it apart from the pack, as well as continue to scrutinise potential revenue model approaches.
Is Duolingo profitable?
Duolingo is not currently profitable; the business reportedly posted losses of $15.8 million in 2020, up from $13.6 million in 2019. The business has continued to lose money at an accelerated rate in Q1 of this year as it ramps up spending on sales and marketing.
Who owns Duolingo?
The ownership of Duolingo is split between a range of financial institutions and individuals. Von Ahn and Hacker reportedly retain a significant stake, with other major stakeholders including NewView Capital, Union Square Ventures and CapitalG.
Board of directors of Duolingo
- Luis von Ahn – Co-Founder/Chief Executive Officer
- Severin Hacker – Co-Founder/Chief Technology Officer
- Denis Meinert – Head of Finance
- Cammie Dunaway: Chief Marketing Officer
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