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Duolingo made a strong debut at Wall Street raising over $500 million worth of funds. The company plans to use these resources for expanding to overseas markets.
On Wednesday, July 28, language-learning app Duolingo made a strong entry at Wall Street, the company pegged a valuation of $6.5 billion with its shares soaring 37% on the first day of Nasdaq listing.
On Wednesday, shares of Duolingo (NASDAQ: DUOL) closed at $139 levels with its IPO price of $95. The company’s listing comes just at the right time of growing investor interest in the ed-tech space. Besides, the pandemic has further fueled the growth of this sector manifold times. With this public listing, Duolingo raised a total of $521 million by selling approximately 5.1 million shares.
Duolingo co-founder and CEO Louis von Ahn said: “Being a public company will allow us to operate at a higher level and move from minor league to major league”. He further added that post the IPO, the company’s focus will be on improving the flagship app. It will also focus to grow its pool of paying customers. For now, Duolingo caters to 40 million monthly active users offering courses in 40 different languages.
Undoubtedly, the largest market for Duolingo is the US which alone caters to 20% of its user-base. Von Ah also noted that the U.S. alone contributes 45% to the company’s revenue. If we look at the revenue break up platform-wise, Apple App Store contributes to 51% of revenue and Google’s Play Store to 19%.
Focus on Overseas Market Especially Asia
The Duolingo CEO said that the company’s focus will also be on expanding to other overseas markets, especially Asia. It enjoys solid popularity on Google. The search for the Duolingo app is 90 times that the search for the phrase “learn Spanish”.
One of Duolingo’s key features of interest to overseas users is its English Language Test. Its language certification has been accredited by more than 2000 universities and institutions worldwide. The Duolingo CEO Louis von Ahn stated:
“If you live in the United States you may not know about this, but worldwide billions of dollars are spent by people having to take tests to prove that they know English. During the pandemic we got a lot of institutions accepting our tests”.
A massive 17 of the top 20 universities consider Duolingo’s online English Test as proof of proficiency. This part of the company’s business currently accounts for 9% of Duoligo’s revenues. Besides, the company has recently launched a free English literacy test Duoling ABC for children in the age group of 3-6.
Duolingo preponed the release of this app owing to the current pandemic conditions as more kids are learning from home. The app is free featuring more than 300 lessons that teach basic reading and writing skills.