Duolingo – how a FREE Learning app; can achieve Total funding $138.3 mm AND have a revenue of $86+ mm.
Enterprise name: Duolingo
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.
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. During Hacker’s doctoral studies, Duolingo became a by-product of this idea, or “happy mistake.” 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.
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, $36 million in 2018, and is projected to hit $86 million in 2019.