Skip to main content
https://www.highperformancecpmgate.com/rgeesizw1?key=a9d7b2ab045c91688419e8e18a006621

Duolingo filed to go public

Duolingo, a Pittsburgh-based language learning business last valued at $2.4 billion, has officially filed to go public.

The 400-person company, which we explored in great detail in our EC-1, was co-founded by Luis von Ahn, the inventor of CAPTCHA and reCAPTCHA, and Severin Hacker. One of the most revealing bits of its story? It’s a route to monetization as a then rare edtech consumer business based outside of Silicon Valley. The company has had a somewhat circuitous journey — full of trial and error — on finding the perfect business model. It eventually landed on subscriptions, despite an original distaste for it thanks to its mission to provide free education.

Luckily, the S-1 reveals that its earlier decisions led to sharp revenue growth at the company.

The vast majority of Duolingo’s revenue comes from subscriptions. In the most recent calendar year, for example, the edtech giant generated 73% of its total top line from subscription incomes. That revenue was followed by advertising incomes and the Duolingo English Test (DET), which represented 17% and 10% of its top line in 2020. (Notably, von Ahn hoped that the DET would be 20% of Duolingo’s revenue by 2019, a figure that it failed to reach by some margin.)

The product-led growth behind edtech’s most downloaded app

Its multi-part business model appears to be paying off. The company’s revenue grew from $70.8 million in 2019 to $161.7 million in 2020, a 129% increase. Of course some of that growth would have happened sans the recent global pandemic, but it’s not hard to see some COVID-related acceleration in the figures. Duolingo also reported $55.4 million in revenue during the first quarter of 2021, representing a 97% growth from the year-ago period.

The company recently turned profitable on an adjusted basis.

But in more strict accounting terms, net losses have grown for Duolingo. In the three months ended March 31, 2021, for example, the company had net losses of 13.5 million, a sharp increase compared to the same period last year when it had net losses of $2.2 million. And from 2019 to 2020, the company’s GAAP net losses expanded from $13.6 million to $15.8 million.

It should be noted that the company’s net margin improved in 2020, as its revenue more than doubled and its losses barely crept higher. The company’s profitability or lack thereof should not prove to be a problem during its impending listing.

In its S-1 filing, Duolingo provided a placeholder $100 million figure for the funds it expects to raise; we’ll get a better idea of how much capital the edtech unicorn may onboard during its IPO when it sets an IPO price range after its roadshow.

The former startup is effectively the kick-off to the Q3 2021 IPO season, one that several inventors have told TechCrunch will be more than active.

Duolingo has raised $183.3 million in venture capital to date. Investors that have meaningful stakes in the company include NewView Capital, Union Square Ventures, CapitalG, Kleiner Perkins, and General Atlantic, which recently got a spot on the cap table through a secondary transaction.

At a run rate of around $220 million today and growth of more than 100%, Duolingo should not have a problem clearing its privately set $2.4 billion price tag. Unless public-market investors are concerned that the edtech market’s growth is mostly behind it. That Duolingo grew by nearly 100% in the first quarter could temper such concerns.

How Duolingo became fluent in monetization

Factoids and other joy

TechCrunch is still digging its way through Duolingo’s IPO filing, but we’ve found a number of details that add more than a little color to its recent growth and business results. Here are some standouts:

  • A “record low” attrition rate in 2020 in which only four employees, or 2% of its workforce left the company.
  • The company eventually plans to launch a “Duolingo Proficiency Score” across its offered languages, with the hopes of creating a “widely accepted indicator of language proficiency level and make Duolingo a global proficiency standard.”
  • It cited Apple’s “Translate” tool, an iOS app launched in 2020 that allows users to translate text sentences or speech between several languages, as a competitor in the ‘risk factors’ section.
  • And finally, it confirmed that it is seeking potential acquisition candidates to add complementary services to its startup.

Duolingo plans to list on the NASDAQ stock exchange using the ticker symbol DUOL.

 

 

Comments

Post a Comment

Popular posts from this blog

Uber co-founder Garrett Camp steps back from board director role

Uber co-founder Garrett Camp is relinquishing his role as a board director and switching to board observer — where he says he’ll focus on product strategy for the ride hailing giant. Camp made the announcement in a short Medium post in which he writes of his decade at Uber: “I’ve learned a lot, and realized that I’m most helpful when focused on product strategy & design, and this is where I’d like to focus going forward.” “I will continue to work with Dara [Khosrowshahi, Uber CEO] and the product and technology leadership teams to brainstorm new ideas, iterate on plans and designs, and continue to innovate at scale,” he adds. “We have a strong and diverse team in place, and I’m confident everyone will navigate well during these turbulent times.” The Canadian billionaire entrepreneur signs off by saying he’s looking forward to helping Uber “brainstorm the next big idea”. Camp hasn’t been short of ideas over his career in tech. He’s the co-founder of the web 2.0 recommendatio...
Post a Comment
Read more

Drone crash near kids leads Swiss Post and Matternet to suspend autonomous deliveries

A serious crash by a delivery drone in Switzerland have grounded the fleet and put a partnership on ice. Within a stone’s throw of a school, the incident raised grim possibilities for the possibilities of catastrophic failure of payload-bearing autonomous aerial vehicles. The drones were operated by Matternet as part of a partnership with the Swiss Post (i.e. the postal service), which was using the craft to dispatch lab samples from one medical center for priority cases. As far as potential applications of drone delivery, it’s a home run — but twice now the craft have crashed, first with a soft landing and the second time a very hard one. The first incident, in January, was the result of a GPS hardware error; the drone entered a planned failback state and deployed its emergency parachute, falling slowly to the ground. Measures were taken to improve the GPS systems. The second failure in May, however, led to the drone attempting to deploy its parachute again, only to sever the line...
Post a Comment
Read more

How the world’s largest cannabis dispensary avoids social media restrictions

Planet 13 is the world’s largest cannabis dispensary. Located in Las Vegas, blocks off the Strip, the facility is the size of a small Walmart. By design, it’s hard to miss. Planet 13 is upending the dispensary model. It’s big, loud and visitors are encouraged to photograph everything. As part of the cannabis industry, Planet 13 is heavily restricted on the type of content it can publish on Instagram, Facebook and other social media platforms. It’s not allowed to post pictures of buds or vapes on some sites. It can’t talk about pricing or product selection on others.   View this post on Instagram   A post shared by Morgan Celeste SF Blogger (@bayareabeautyblogger) on Jan 25, 2020 at 7:54pm PST Instead, Planet 13 encourages its thousands of visitors to take photos and videos. Starting with the entrance, the facility is full of surprises tailored for the ‘gram. As a business, Planet 13’s social media content is heavily restricted a...
3 comments
Read more