The immensely popular language-learning app Duolingo has filed a prospectus with the SEC and plans to go public. The company, which offers language courses, saw great revenue increases in 2020, although its net losses also increased.
Duolingo started in 2011 with private beta testing and then launched to the public in 2012. TechCrunch noted that although the firm initially resisted the adoption of a subscription model due to a commitment to providing free language education, it now makes the majority of its revenue from subscriptions.
What does Duolingo do?
Duolingo was co-founded by Severin Hacker and Luis von Ahn. Von Ahn also created CAPTCHA and reCAPTCHA and was a professor at Carnegie Mellon University. Hacker was a graduate student in 2009 when they created Duolingo. The firm is one of the most valuable private startups in Pittsburgh history.
Crunchbase reveals that Duolingo has raised $183.3 million to date. The major investors include Kleiner Perkins, Capital G, Drive Capital, General Atlantic, and Durable Capital Partners.
Currently, Duolingo offers 95 courses covering 38 distinct languages. Its offerings are available in the most commonly spoken languages like English, Spanish, and French, as well as a wide selection of rare or endangered languages.
Users can learn from the free version of the courses available on the Duolingo app or choose a paid subscription with benefits like no advertisements. CNBC noted that the company made 51 percent of its total revenue in 2020 from the Apple App Store and 19 percent from sales in the Google Play Store.
The company also offers its Duolingo English Test, or DET, which was responsible for 10 percent of its income last year. The advertising income comprised 17 percent of its 2020 revenue. Meanwhile, 73 percent of the company’s total 2020 revenue came from subscriptions.
Duolingo IPO news
The educational company, whose name appears in nine times as many Google searches as the phrase “learn Spanish,” has filed to list publicly on the Nasdaq Exchange. The expected ticker symbol for the company is “DUOL,” but a price range hasn't been determined yet.
The company’s pre-money valuation at the time of its Series H funding round in 2020 was $2.4 billion. TechCrunch stated that the company recently became profitable on an adjusted basis.
In the first quarter of 2021, Duolingo saw 97 percent revenue growth YoY to $55.4 million. The net losses for the first quarter also grew to $13.5 million, which was a sixfold increase over the same period in 2019.
When will Duolingo go public?
So far, the educational tech firm has only filed its initial S-1 prospectus with the SEC. The $100 million funding goal is likely a placeholding figure. More details will be determined after its IPO roadshow and its price range is set. The date for its IPO isn’t known yet.