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Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue

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.

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2 Feb Posted on Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue

I've heard of Duolingo many times but have not had a chance to use it myself. What an incredible and valuable application this sounds like. I also really appreciate the effort to continue to make the technology open and accessible to all. I love the detail of your research and can't help but wonder just how 2020 will effect revenue for Duolingo. Plus, it's great to learn that it may in fact be possible to do something that is actually profitable as a PhD student......

2 Feb
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miguel strother @mcs1

I've heard of Duolingo many times but have not had a chance to use it myself. What an incredible and valuable application this sounds like. I also really appreciate the effort to continue to make the technology open and accessible to all. I love the detail of your research and can't help but wonder just how 2020 will effect revenue for Duolingo. Plus, it's great to learn that it may in fact be possible to do something that is actually profitable as a PhD student......

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2 Feb Posted on Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue

Hi Anouk. Thank you for sharing this! I am personally motivated to download this app--I have always wanted to learn French! And, the Freemium model seems to be a good business strategy--as a consumer it gives me an opportunity to wet my toes a bit and to decide if I want to buy the premium version. Duolingo is a perfect example of an entrepreneurial venture that not only anticipates change but also proactively and creatively addresses it while at the same time adding original value to the idea.

2 Feb
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manize nayani @mnayani

Hi Anouk. Thank you for sharing this! I am personally motivated to download this app--I have always wanted to learn French! And, the Freemium model seems to be a good business strategy--as a consumer it gives me an opportunity to wet my toes a bit and to decide if I want to buy the premium version. Duolingo is a perfect example of an entrepreneurial venture that not only anticipates change but also proactively and creatively addresses it while at the same time adding original value to the idea.

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1 Feb Posted on Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue

Firstly, I have to mention that I was unaware of the startup story of Duolingo even though I have used the app on many occasions in the past. To my mind, this represents a classic example of an entrepreneur that saw a problem (automated software translation lacking the efficiency of bilingual speakers) and they then asked themselves how they could promote bilingualism in a way that would make it accessible to everyone. Thus instead of just seeing a problem, they saw an opportunity to address the problem. Key to all of this of course also meant the assembly of a great team of people working together at Duolingo (Hacker's supervisor already had experience in transitioning academic ideas into the market). This has truly turned into probably one of the most successful ventures of recent years.

1 Feb
0 Thumbs Up!
Carla Pretorius @cp101

Firstly, I have to mention that I was unaware of the startup story of Duolingo even though I have used the app on many occasions in the past. To my mind, this represents a classic example of an entrepreneur that saw a problem (automated software translation lacking the efficiency of bilingual speakers) and they then asked themselves how they could promote bilingualism in a way that would make it accessible to everyone. Thus instead of just seeing a problem, they saw an opportunity to address the problem. Key to all of this of course also meant the assembly of a great team of people working together at Duolingo (Hacker's supervisor already had experience in transitioning academic ideas into the market). This has truly turned into probably one of the most successful ventures of recent years.

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1 Feb Posted on Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue

Duolingo is a fanstasitc app and program in general. It engages its users and challenges them to grow. This app is used in my school in the French program. With its built in curriculum it allows teachers to have students practice at their own pace and meet with students individually to assess their progress. It is a powerful and fun way to learn a language.

1 Feb
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gregory regehr @greg26

Duolingo is a fanstasitc app and program in general. It engages its users and challenges them to grow. This app is used in my school in the French program. With its built in curriculum it allows teachers to have students practice at their own pace and meet with students individually to assess their progress. It is a powerful and fun way to learn a language.

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1 Feb Posted on Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue

From day 1 I was impressed by DuoLingo's interface - it seemed to be the best example of gamification I'd come across thus far. I suspected that the creator either had an innovative education background or that they assembled a crack team to solve the real problem of language acquisition - Sticking with it. Duolingo successfully employs tactics to incentivize completing modules and returning frequently so skills aren't lost. Nice to see the company being highlighted here. I am also heartened to see that Hacker has a formal education background. I just commented on the Desmos post regarding formal education and technological entrepreneurialism - while there might not be an obvious ethical issue for a mathematics program, I've listened to experts in their fields discuss the problem of dropouts designing the apps we use everyday; is innovation the only virtue that matters, or should we ensure that our innovators have a well informed background in ethics so that the design on the front end and users' data on the back end are ethically sound.

1 Feb
0 Thumbs Up!
christopher spanis @cspanis

From day 1 I was impressed by DuoLingo's interface - it seemed to be the best example of gamification I'd come across thus far. I suspected that the creator either had an innovative education background or that they assembled a crack team to solve the real problem of language acquisition - Sticking with it. Duolingo successfully employs tactics to incentivize completing modules and returning frequently so skills aren't lost. Nice to see the company being highlighted here. I am also heartened to see that Hacker has a formal education background. I just commented on the Desmos post regarding formal education and technological entrepreneurialism - while there might not be an obvious ethical issue for a mathematics program, I've listened to experts in their fields discuss the problem of dropouts designing the apps we use everyday; is innovation the only virtue that matters, or should we ensure that our innovators have a well informed background in ethics so that the design on the front end and users' data on the back end are ethically sound.

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31 Jan Posted on Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue

I really like the freemium approach, it seems to work well and attract and retain the most users. They periodic advertising seems to be effective and make up for the patrons not switching to premium. While I'm a big fan of the app and would totally utilize it in the classroom or in my personal life. I read some formes about issues with new changes that many patrons are upset with this new model. For example the amount of lessons per level. While this is just a little change its easy to loose patrons who don't pay anything. All that aside this app is still crushing it!

31 Jan
0 Thumbs Up!
michael meroniuk @meroni12

I really like the freemium approach, it seems to work well and attract and retain the most users. They periodic advertising seems to be effective and make up for the patrons not switching to premium. While I'm a big fan of the app and would totally utilize it in the classroom or in my personal life. I read some formes about issues with new changes that many patrons are upset with this new model. For example the amount of lessons per level. While this is just a little change its easy to loose patrons who don't pay anything. All that aside this app is still crushing it!

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31 Jan Posted on Duolingo FREE Learning app; Total funding $138.3 mm AND $86+ mm revenue

Duolingo is a great app that helps students learn to speak different languages. Severin has taken this idea and made millions with it. As a teacher I would suggest using this app in a classroom or even at home for my ESL students to get further help speaking and learning english.

31 Jan
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Tyler @rsenini

Duolingo is a great app that helps students learn to speak different languages. Severin has taken this idea and made millions with it. As a teacher I would suggest using this app in a classroom or even at home for my ESL students to get further help speaking and learning english.

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