Language-learning app Duolingo files to go public with revenues doubling year-over-year

Business

CNBC 28 June, 2021 - 05:14pm 20 views

When is duolingo going public?

Duolingo, whose co-founder and CEO Luis von Ahn is shown in this May 2021 photo, is going public. MarketWatchDuolingo, the fast-growing language-learning app, files for IPO

Language-learning app Duolingo filed its IPO prospectus on Monday, and plans to list on the Nasdaq under ticker symbol "DUOL."

Revenue at the Pittsburgh-based company rose 129% last year to $161.7 million. The company brought in $55.4 million in revenue for the quarter ended on March 31 — a 97% jump from last year — while net losses widened more than six-fold to $13.5 million, according to the filing.

Duolingo offers 95 courses across 38 distinct languages — from the world's most spoken, such as Spanish, French and Italian, to endangered languages like Hawaiian, Navajo and Scottish Gaelic. In addition to its core platform, the company created the Duolingo English Test, an affordable and convenient language certification option accepted by more than 2,000 universities and institutions worldwide.

The company is highly dependent on distribution through mobile app stores. In 2020, the company says, it derived 51% of revenue from Apple's App Store and 19% from the Google Play Store, and was the top-grossing app in the Education category for each store. Duolingo also claims popularity in Google searches, with more than nine times as many searches for its name as for the phrase "learn Spanish."

Duolingo is a three-time CNBC Disruptor 50 company that most recently ranked No. 42 on last year's list, and is one of the most highly valued private start-ups in Pittsburgh history.

Kleiner Perkins, Union Square Ventures and Alphabet's independent growth fund CapitalG are among the Duolingo's biggest venture capital investors. The company hired Goldman Sachs, Allen & Company, Evercore ISI and Barclays to lead the offering.

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Duolingo filed to go public

TechCrunch 29 June, 2021 - 08:42pm

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 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.

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

Duolingo files for US IPO as lockdown learners lean into languages

City A.M. 29 June, 2021 - 08:42pm

The Pittsburgh-based company, which was valued at $2.4bn (£1.7bn) following a funding round in November, last night unveiled plans to list on the Nasdaq exchange.

It comes after Duolingo’s revenue soared almost 130 per cent to $162m last year as more people took up language learning during the pandemic.

Revenue almost doubled in the first three months of the year, while pre-tax losses ballooned from $2.2m to $13.5m.

Duolingo, which was founded in 2011 by engineers Luis von Ahn and Severin Hacker, offers courses in 40 languages to roughly 40m monthly active users.

There are more people learning certain languages, such as Irish and Hawaiian, on the company’s platform than there are native speakers of those languages worldwide, it said in the filing.

Duolingo added that its flagship app has more than 500m downloads and is the top-grossing education app on both Google Play and the Apple App Store.

Goldman Sachs and Allen & Company are the lead underwriters for the IPO.

Language-learning app Duolingo files for US IPO, reveals revenue surge

Economic Times 29 June, 2021 - 08:42pm

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Daily Crunch: Language-learning app Duolingo translates strong revenues into IPO filing

TechCrunch 29 June, 2021 - 08:42pm

Hello and welcome to Daily Crunch for June 29, 2021. Have you ever wanted to ditch civilization and move to the woods, but still be able to work? We have good news if that’s you. Below you’ll find lots more, including Facebook’s latest product offering and how one startup wants to save bees. Enjoy! — Alex

Up top today in our roundup of recent startup news is Beeflow. We’re putting it at the top of the list because (1) It’s about bees and (2) It’s called Beeflow. What’s not to love? Per Jordan Crook, the startup may have an answer to the decimation of the global bee population. And it might make money to boot.

Now, the rest of the news:

And I would be remiss to not mention that I covered venture capital rounds this morning from co-op and Arrows, along with news regarding Acceleprise’s rebrand.

In a recent private equity survey, 80% of respondents said their co-investments with people outside traditional VC firms outperformed their PE fund investments.

Alternative investors are highly motivated, and because they’re seeking higher returns than are generally available in public markets, they are less daunted by risk. In return, they benefit from less expensive fee structures and develop close ties with VCs, enlarging the talent pool as they build investment skills.

These relationships have direct benefits for VCs as well, such as more flexibility with diversification and consolidated decision-making power.

“With the right deal structure, deal selection and deal investigation, co-investors can significantly increase their returns,” says C5 Capital Managing Partner William Kilmer, who wrote an Extra Crunch post for VCs considering an alternative path.

Turning from the smaller upstarts to the megagiants, it’s been a good week to be a Big Tech company. Facebook crossed the $1 trillion market cap threshold, though it dipped back under the magic number this afternoon. Here’s what else is going on from the Bigs:

TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.

If you’re curious about how these surveys are shaping our coverage, check out this interview Extra Crunch Managing Editor Eric Eldon did with Scott Tong, “The pandemic showed why product and brand design need to sit together.”

Duolingo Language-Learning Platform Files for IPO

TheStreet 29 June, 2021 - 08:42pm

The Pittsburgh company, which offers 95 courses in 38 languages, plans to trade on the Nasdaq with the ticker DUOL. 

The company, founded in August 2011, employs 400. It has about 40 million monthly active users. Its programs are free for users; a premium paid version, taken up by some 5% of its users, provides additional features.

For the first quarter Duolingo’s net loss widened to $13.5 million, or $1.04 a share, from $2.2 million, or 18 cents a share, in the year-earlier quarter. Revenue nearly doubled to $55.4 million from $28.1 million.

Duolingo says it ranked as the top-selling app in the education areas of both stores.

Duolingo’s investors include Union Square Ventures, New Enterprise Associates, Kleiner Perkins Caufield & Byers, CapitalG (formerly Google Capital), Drive Capital and General Atlantic. Also backing the company: the actor Ashton Kutcher and the investor and author Tim Ferriss.

Goldman Sachs and Allen & Co. are managing the IPO.

In other IPO news Tuesday, Canadian Solar CSIQ shares rose, as Roth Capital praised the company's application for an initial public offering of its CSI Solar subsidiary on the Shanghai Stock Exchange.

The IPO would offer Canadian Solar a lower cost of capital, and it can use the funds to increase capacity and boost earnings growth, analyst Philip Shen said, according to Bloomberg.

Shen has a buy rating and a $55 price target for Canadian Solar. The shares recently traded at $46.01, up 1.1%.

Duolingo

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