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Duolingo Joins the Billion Dollar Unicorn Club

Posted on Wednesday, Oct 21st 2020

Several analysts expected language teaching site Duolingo to list this year. But the global economic and pandemic conditions have usurped quite a few well-laid out plans this year. It doesn’t look like Duolingo will list soon.

Duolingo’s Financials

Duolingo operates a freemium model that provides most of its users, including school users, access to the platform for free. It earns revenues through advertisements and a subscription-based premium access model, Duolingo Plus. Duolingo Plus provides users with the ability to learn at their pace, in an ad-free environment and even download lessons for offline learning. The subscription model costs $12.99 a month.

Additionally, Duolingo is also building on an enterprise revenue stream by offering English language assessment products such as Stories, Tiny Cards, Dictionary, and Podcasts that are focused on language training. Overall, Duolingo reports over 7 billion exercises completed each month and a platform that is accessed by more than 300 million users.

Duolingo is privately held and does not publish its financials, but its last reported revenues were at $40 million for the year. Reports estimate that Duolingo ended 2019 with revenues of $86 million and expects revenue to climb to $160 million this year.

Duolingo has raised $148.3 million from investors including General Atlantic, CapitalG, Drive Capital, Tim Ferriss, New Enterprise Associates, Kleiner Perkins, A-Grade Investments, and Union Square Ventures. Its last round of funding was held in April when it raised $10 million in a round led by General Atlantic at an undisclosed valuation. Another round held in December last year had pegged its valuation at $1.5 billion.

Duolingo’s Product Expansion

Duolingo continues to expand its language and product offerings. Its English language certification test that is priced at $20 apiece was criticized for only having content up to level A2 CEFR, the basic level test. In response to the criticism, Duolingo is now aiming to have content for levels B1 and B2 added as well.

Additional content enhancements include the addition of Stories that allow users to follow a conversation between two people and then assessing comprehension by asking questions based on the stories. It also released Duolingo Events that connects learners from all over the world to help them practice in-person conversation. For leading language courses such as Spanish and French, it now offers podcasts as well. Duolingo now has courses in 35 languages including Chinese, Korean, Hindi, Arabic, Navajo, and Hawaiian. It has grown from 95 employees to 200 and opened new offices in New York, Seattle, and Beijing.

Analysts estimate that more than 2 billion globally are studying a foreign language, and a lot of them are moving online. Digital language-learning generates $6 billion in revenue globally and is expected to grow to $8.7 billion by 2025.

Duolingo is not the only player in the market though. Companies like Babbel and Rosetta Stone are also providing language learning courses, but Duolingo has a much wider catalog of courses and a much larger audience. Rosetta Stone, for instance, offers 25 languages, and Babbel offers 14 compared with Duolingo’s portfolio of more than 35. Rosetta Stone also has a significantly lower user base of over 500,000 and Babbel has just over 1 million. But Duolingos’ monetization remains low. According to reports, a modest 1.75% of its user base was paying for the premium model in 2018.

I am an avid user of Duolingo and use it everyday to practice French. I pay for the app.

Photo Credit: Pola Esperanto-Junularo /

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