How Does Duolingo Make Money?
World's largest (language) learning platform
In the first edition of the newsletter, I cover one of my favorite companies - Duolingo!
About Duolingo
Duolingo is a free science-based language education platform that has organically become the most popular way to learn languages online. It was started by Luis von Ahn (who also founded CAPTCHA, reCAPTCHA, and the Google Image Labeller).
Fun Fact: reCAPTCHA is actually a crowd-sourced effort to improve the process of digitizing books by sending words that cannot be read by computers to the Web in the form of CAPTCHAs for humans to decipher.
Based on his success with reCAPTCHA, von Ahn devised a novel way of crowdsourcing translations while incentivizing users to learn a new language.
Duolingo's original vision - translate the whole web into every major language.
To put the potential benefit of Duolingo into perspective, if 1M users used Duolingo to learn Spanish, the entirety of English Wikipedia could be translated to Spanish in 80 hours.
Stats
🐣2011 Founded
👩💻300M Downloads, 1M Paid (growing 200% y-o-y 📈)
💰86M (proj. 2019) Revenue
💸$138.3M Raised
🦄$1.5B Valuation
How they make money
Until Jan 2017
🤯 Duolingo started monetizing by selling Language Translations. Early customers like BuzzFeed and CNN used Duolingo’s extensive crowd-sourced reach to translate their content.
After Apr 2017
Freemium model with Duolingo Plus
The revenue for the “free” part comes from advertising while on a premium model, the income is subscription-based: Ad-free, offline access, extra hearts, and streak repairs for $6.99/mo.Duolingo has crossed 1M users for the Duolingo Plus subscription. With ~$84/yr per paying user, that’s $84M in ARR from the Premium product alone. The ad-revenue from the 30M active users contributes additional revenue as well.
Duolingo Language Certification ($49 for English Certification similar to IELTS) With the suspension of traditional English proficiency tests in countries most affected by the coronavirus, a wave of US institutions are now accepting the results of the Duolingo English Test, either as stand-alone proof or as a supplement to other measures of English-language proficiency.
Other Offerings:
Duolingo ABC - ad-free app for kids (free)
Duolingo Events: Meet language learners near you
Tinycards - Learn anything with fun flashcards, or create your own flashcards
Future
Duolingo is looking at a potential IPO in 2021. With recent strategic hires including CFO and General Counsel, Duolingo seems to be setting up the team that will take the company public.
In one of the interviews, Luis von Ahn says:
“We are going to continue with languages until most everybody in the world who is trying to learn a language is using one of our products.”
With a growing audience and new initiatives, Duolingo looks well placed to disrupt the Learning space beyond languages. Looking forward to the innovations that the Duolingo drives in the next few years. Until next time…
I’m new to this and would love to hear your thoughts. Appreciate it if you could share this with your network who might be interested in learning about such unique business models.
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Interesting article !! Precise and short.
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