- Language-learning app Duolingo has filed for an IPO on the Nasdaq under the ticker symbol “DUOL”.
- The company did not confirm how much it was seeking to raise in its IPO or what its target share price is.
- In the first quarter of 2021, Duolingo saw 97% growth compared to the same quarter in 2020.
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Language-learning app Duolingo filed for an initial public offering on the Nasdaq under the ticker symbol “DUOL” on Monday, but did not disclose its valuation or share price targets, Securities and Exchange Commission documents show.
The app, whose last confirmed valuation was $2.4 billion in last November, advertised its revenue and subscriber growth to potential investors in the SEC documents alongside its position in the market.
The app maker noted 97% revenue growth to $55.4 million in the first quarter of 2021, compared to the same period last year, where the app made $28.1 million. In 2020, Duolingo saw 129% year-over-year revenue growth, as revenue more than doubled from $70.8 million in 2019 to $161.7 million in 2020. The app noted losses worth $13.5 million in the first quarter of this year, compared to $2.2 million in the Q1 of 2020.
As of March 31st 2021, Duolingo reported 40 million monthly users and 1.8 million paying subscribers. 72% of its revenue came from subscriptions, which unlock an ad-free experience and additional features on the app.
Duolingo, which is backed by CapitalG, which falls under the umbrella of Google’s parent company Alphabet, offers users free access to courses in 40 languages, including endangered ones, and focuses on gamifying the learning experience to attract and motivate users. Additionally, it offers the Duolingo English Test that can, for example, be used by international students to prove their English proficiency when applying for university in English-speaking countries. 11% of the app’s revenue came from these tests and other revenue combined in the first quarter of 2021. The remaining 17% of revenue was made through advertising.
Within the language learning market, online education is the fastest growing segment and will grow to $47 billion in 2025, up from $12 billion in 2019, according to HolonIQ data cited by Duolingo in its IPO prospectus.
Goldman Sachs, Allen & Company, Evercore ISI and Barclays will lead Duolingo’s IPO offering. Two classes of stocks will be for sale, with class A shares being equivalent to one vote and class B shares equal ling 20 votes, the SEC filing shows.
Earlier this week, Renaissance Capital data showed that the second quarter of 2021 was the busiest quarter for IPOs since 2000 and that IPOs have staged a comeback after falling steeply in May this year. On average, IPOs saw returns of 34% in the last quarter.
The headline has been amended to reflect Alphabet does not back Duolingo directly, but rather indirectly through its CapitalG fund.