Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue
Originally Posted By anouk tenten on January 31, 2020
Duolingo – how a FREE Learning app; can achieve Total funding $138.3 mm AND have a revenue of $86+ mm.
Enterprise name: Duolingo
Since: 2009
Owner and CTO: Severin Hacker
Duolingo is an American platform that includes a language-learning website and mobile app, as well as a digital language-proficiency assessment exam. The company uses the freemium model; the app and the website are accessible without charge, although Duolingo also offers a premium service for a fee.
As of November 2019 the language-learning website and app offer 94 different language courses in 23 languages. The app has over 300 million registered users across the world.
Business model:
Most language-learning features in Duolingo are free of charge, but it uses periodic advertising in both its mobile and web browser applications,which users can remove by paying a subscription fee. This feature, which is named ‘Duolingo Plus’, includes benefits such as having unlimited hearts and being able to skip levels. It originally employed a crowd sourced business model, where the content came from organizations that paid Duolingo to translate it.
Ambition and Motivation:
Initially, Hacker and his former graduate advisor, Luis von Ahn, wanted to develop an application that could translate internet sites, so that they would be accessible for non-English speakers. They felt that automated translation software wasn’t as effective as using the skills and knowledge of bilingual speakers.[9] During Hacker’s doctoral studies, Duolingo became a by-product of this idea, or “happy mistake.”[10] Hacker’s goal for Duolingo was to make it “100% free” so the most disadvantaged person with an internet connection would still have access to it.
History and growth:
The project was started at the end of 2009 in by Carnegie Mellon University professor Luis von Ahn (creator of reCAPTCHA) and his graduate student Severin Hacker, and then developed along with Antonio Navas, Vicki Cheung, Marcel Uekermann, Brendan Meeder, Hector Villafuerte, and Jose Fuentes.
On October 19, 2011, during in its “Early Stage Venture” stage Duolingo raised $3.3 million from a Series A first-round of funding, led by Union Square Ventures, with participation from author Tim Ferriss and actor Ashton Kutcher‘s firm, A-Grade Investments.
Duolingo launched into private beta a month later on November 30, 2011, and accumulated a waiting list of more than 300,000 users. On June 19, 2012, Duolingo later launched for the general public.
On September 17, 2012, while still in its “Early Stage Venture” stage, Duolingo raised $15 million from a Series B second-round of funding led by New Enterprise Associates, with participation from Union Square Ventures bringing Duolingo’s total funding to $18.3 million.
On February 18, 2014, Duolingo entered its “Late Stage Venture” stage, and raised $20 million from a Series C third-round of funding. It was reported Duolingo had about 25 million registered users, 12.5 million active users, and 34 employees.
On June 10, 2015, Duolingo raised $45 million from a Series D fourth-round of funding led by Google Capital, bringing its total funding to $83.3 million, a valuation of $470 million, as well as passing 100 million users – In April 2016 it was reported that Duolingo had 17 million monthly users.[36][37]
On July 25, 2017, that Duolingo raised $25 million from a Series E fifth-round of investment from Drive Capital, bringing its total funding to $108.3 million, a valuation of $700 million, as well as passing 200 million users and having 25 million monthly users
On December 4, 2019, it was announced that Duolingo raised $30 million in a series F sixth-round of investment from Alphabet’s investment company CapitalG, bringing a total funding of $138.3 million, a valuation of $1.5 billion, reporting 30 million monthly active learners. Duolingo will use the funds on developing new products and expanding its team.
Duolingo had a revenue of $1 million in 2016, $13 million in 2017,[52] $36 million in 2018,[53] and is projected to hit $86 million in 2019.
I will be honest, if you asked me a year ago I would not be able to tell you what Duolingo is. However, with our option courses this year students requested learning a second language, actually for many of them it is their third or fourth, and as none of the grade 8 teachers knew a second language we were introduced to Duolingo. In addition to some culture projects they must complete, the students must also practice each day on Duolingo. I have never seen a group of grade 8s be so quiet for 45 minutes, and that is three different groups with about 20 students in each group. Also, as I was getting this copied over, my son (10) and daughter (6) were interested in what I was doing, so I explained the program to them and now they both want to start using it.
One feature I really enjoy is that you first choose your language and then it gives you a list of languages you can learn. This has worked out well for my students who are new to Canada and are trying to learn English, although they still do not have all languages covered. I also have one student who is afraid of losing his native language and wants to be able to communicate with mom and dad at home so he is continuing to learn Spanish. Another feature I like, is that they are currently beta testing Navajo as I think it is very important that we keep the Aboriginal languages alive.
What really surprised me from the original post was that when Duolingo only had 34 employees they were servicing its 12.5M users! Today, they have over 200 employees and over 300M users. It’s interesting that Duolingo’s site boasts that the richest man in the world is learning a language through Duolingo (Bezos? Gates?). Not too sure why the richest person would need to learn a language, so I’d say there is something to be said about learning another language, or at least about the website.
I agree with Michael that my middle school students use this app quite eagerly. I have been using Duolingo alongside my in class French course for a few years now, and find that the app offers a nice complement to what I am teaching. I think it’s wonderful that First Nations languages are showing up. This could be a way to save some of these languages.
My question is, is Duolingo’s main source of revenue through advertising?
Neal, I am sure the main revenue stream would be through advertising or you can also upgrade your account. This is an interesting idea, that I have been seeing on more and more learning programs, such as Prodigy and Squiggle Park: Dreamscape. The idea is quite smart, offer the program so that it can be implemented within the classroom for free. Then students will bring it home and continue to play and knowing where their peers are, they can upgrade and get more features.
Funny you mention that you just noticed this. Since returning to the classroom I have noticed that the typing website that I have recommended to my students in the past has a number of pop-ups that have appeared, and weren’t there before. As I was pointing this out to a grade 6 class mostly to tell them to ignore the ads and move on, one of the students suggested that since COVID hit, and many classes went online, companies are running ads for revenue. Going to have to look out for that student in these forums in ten years.
Hi Neal,
I also think it is about time that First Nations Languages will be on Duolingo. Seesaw also uses the same strategy of having a service free of charge, but if you want more unlimited features, then you pay for a subscription fee for Spotify Plus. It is the same model that Spotify used. I don’t think Seesaw has advertising, however, which is clearly a source of revenue that works. It seems as though all of this is industry standard, so if there something that could disrupt this subscription scheme in a way that could benefit the customer, that would be a game-changer. Just brainstorming, perhaps in ed-tech this could be an online education platform for schools featuring unlimited plus access to select popular brands (Seesaw, Duolingo). I don’t know what kind of deal a platform like this would need to cut with the companies themselves… ideas?
I’m actually surprised by how Duolingo only brings in $86 million yearly. Not that it’s a small amount by any stretch of the imagination, but it is the leader in a field that is potentially very lucrative (think TOEFL and IELTS). Of course, it’s not really recognized in any official capacity, but many companies also offer foreign language courses at a much higher cost. This is why I’m impressed by how they still retained this (largely free) freemium model. Perhaps once they reach a certain critical mass (as in 300 million isn’t enough), they would start to charge more and actually extract some profit, but this restraint (due to reasons ethical or otherwise) is what impresses me about Duolingo’s leadership.
I am particularly drawn to the Language Proficiency certification that Duolingo offers through online testing. The test takers can take the test online from any part of the world. The test scores are accepted by thousands of institutions globally. People prefer Duolingo language proficiency tests due to the convenience it offers for taking the test from home or any where else. The results are processed faster within two days and it is the most affordable language certification test. Duolingo charges just $49 for the test including the service of sending the results to three institutions named by the test taker. All the four language skills are tested, and some research studies proved its standard equivalency in comparison with IELTS and TOEFL.
Hi Neal,
I also think it is about time that First Nations Languages will be on Duolingo. Seesaw also uses the same strategy of having a service free of charge, but if you want more unlimited features, then you pay for a subscription fee for Spotify Plus. It is the same model that Spotify used. I don’t think Seesaw has advertising, however, which is clearly a source of revenue that works. It seems as though all of this is industry standard, so if there something that could disrupt this subscription scheme in a way that could benefit the customer, that would be a game-changer. Just brainstorming, perhaps in ed-tech this could be an online education platform for schools featuring unlimited plus access to select popular brands (Seesaw, Duolingo). I don’t know what kind of deal a platform like this would need to cut with the companies themselves… ideas?