Language learning startup Duolingo has filed to go public.
The East Liberty based company filed a form S-1 with the Securities and Exchange commission Monday.
The two co-founders — Luis von Ahn and Severin Hacker — met at Carnegie Mellon University and have since grown their company to include more than 400 employees and offices in New York City, Seattle, Beijing and Pittsburgh. The Duolingo app, which helps people learn language through daily reminders from a helpful and sometimes snarky green owl, has more than 500 million downloads.
The startup, which launched in 2011, offers at least 98 total courses across 40 languages, from Spanish to Arabic to Yiddish to Klingon. Users complete more than 7 billion exercises each month.
The two co-founders started Duolingo as a way to combat inequalities in education, the company said in its SEC filing. Technology like smartphones and the Duolingo app — which offers “bite-sized, on-demand and engaging” content, it said — can make learning more accessible and equitable.
“The main thing you need to know is that I plan to dedicate my life to building a future in which, through technology, every person on this planet has access to the best quality of education,” Mr. von Ahn wrote in a letter to investors.
“And not only that, but a future in which people want to spend their time learning. Duolingo is that platform for building that future, and we are just getting started.”
So far, it has caught on, the company said in its filing. Duolingo is the top-grossing app in the education category on Google Play and the Apple App store. On Google, people search the term “Duolingo” nine times more often than “learn Spanish.”
Karin Tsai, director of engineering at Duolingo, said the company’s approach has become more sophisticated over the years, but its mission to provide free education through technology has stayed constant. The company relies on analytics but recognizes the importance of keeping an open mind, she said Tuesday at an event hosted by tech news outlet TechCrunch to highlight Pittsburgh’s tech ecosystem.
“We found it made us smarter as a company over time,” Ms. Tsai said.
On Tuesday, Mayor Bill Peduto said Duolingo’s initial public offering could bring more talent to the city to bolster startups.
“It is a company that is committed to making the world a better place,” he said. “That’s something that makes every Pittsburgher proud.”
Duolingo lost $15.7 million in 2020 — up from a net loss of $13.5 million in 2019 — but the company’s revenue has doubled over the past year.
Revenue grew from $70.8 million in 2019 to $161.7 million in 2020, according to its S-1 form. In the first three months of 2021, it reported $55.4 million in revenue.
The app is free but users can purchase a subscription to avoid the ads that appear at the end of each lesson. By this March, about 5% of Duolingo’s monthly active users — or 1.8 million users — were paid subscribers, the company said.
About 73% of the company’s revenue came from subscriptions in 2020 and the beginning of 2021. Another 17% came from advertising. The English certification exam, which higher-education institutions use for admissions, accounted for about 10%.
Duolingo has been planning this move for some time.
Spokesperson Michaela Kron told the Post-Gazette in December 2019 that it was planning to try its hand as a public company in 2021. The COVID-19 pandemic temporarily put those plans in question as the company took stock of market conditions and other external factors.
At the end of 2019, Duolingo had just announced a $30 million funding round that tipped its valuation over $1 billion, earning the company a “unicorn” status. In investment parlance, the term “unicorn” is used to describe a privately held startup with an estimated worth over $1 billion.
Duolingo announced another funding round in November 2020 that brought its total funding to $183 million and its valuation to $2.4 billion.
Although the COVID-19 pandemic led to some doubt about the future of Duolingo as a public company, it also spurred user growth as people stayed home to learn and play. Learners grew 34% in 2020 compared to the year before, according to the SEC filing. Paying subscribers grew 84% year over year.
Duolingo is proposing to trade on the Nasdaq under the symbol DUOL.
Lauren Rosenblatt: lrosenblatt@post-gazette.com. Emma Skidmore contributed reporting.
First Published: June 29, 2021, 12:52 p.m.
Updated: June 29, 2021, 1:07 p.m.
