Gone is the time when people just knew one language. It is not uncommon to meet people who sometimes know more than just one language ranging from Hindi and English to French, Spanish, Italian, German and even Mandarin. Duolingo has revolutionized it.
The entire process of globalisation and industrialisation paved way for people to learn more than just one language. Duolingo came at the right time in the market to sweep the market with it’s easy to use interface and a perhaps more mobile way to learn new languages.
According to the company’s website, it has more than 300 million users. Thus, making it the most downloaded education app in the world and the most popular language learning platform. The Apple Store claims that these 300 million users complete more than 7 billion exercises every month. In fact, in 2013, it was chosen by Apple as its iPhone App of the Year.
Duolingo is designed to feel like a game and scientifically proven to be effective.
Duolingo was founded in 2009 by a serial entrepreneur named Luis von Ahn, with his co-founder Severin Hacker. Luis von Ahn is also the CEO of reCaptcha and is also referred by many as the pioneers of crowd-sourcing.
Duolingo began as an academic project at Carnegie Mellon after Ahn had sold his second company to Google. Ahn felt the need for an online platform to help people learn a language. In 2009, the age of internet was blooming and most people who were learning new languages had each found their purpose. For some it was a new job, for others it was just curiosity. Ahn banked on this new craze and developed Duolingo with his PhD student Hacker.
Duolingo banked on the word of mouth strategy to popularise after its public launch in 2011. It claims to have never spent money on advertising. It began with a beta program with 300,000 users in 2009 where it was offered 100% free and then fully launched in 2012 where the feature the continued. Until it was soon modified in 2016 to have in built purchases in the form of streaks.
A user on Duolingo forum posted a message from the founder, which contradicted the message on the website that said,” Learn a language for free, forever.”
“Hi everybody. I’m Luis, the CEO of Duolingo. This is a small test we are trying out on the iPhone app, precisely so we can offer education for free!
As we expand our operations to serve more and more users, we have to find ways to remain a viable company. We spend more than US$40,000 per day — on developer salaries, server costs, etc.
The motivation for this test is that people email us every day asking for their streaks to be repaired because they forgot to practice the previous day. Many of them have offered to pay us for this, so we thought this was a feature we could offer to help us cover our costs without hurting the learning experience at all.
We will continue testing different ways to pay the bills, so long as they are compatible with our dream of being able to provide free language education to the world.”
Read More: Why Google Hasn’t Succeeded in China
EXPANSION OF DUOLINGO
What began as a simple application soon broadened its horizons to venture into new markets other than the US with new ideas. It came up with Duolingo for Schools in 2016, In 2017, 100,000 classrooms were already using this application. Duolingo lessons gave each student personalized feedback and practice, preparing them to get the most out of classroom instruction. This strategy worked and it was soon spreading like wildfire to the extent that even governments appreciated the app for its method of teaching.
Number of downloads of Duolingo Apps as of 2019
It also came up with a The Duolingo English Test (GET) , a standardised certification for proficiency in English. This was soon accepted by more than 200 global institutions. It also came up with Tinycards, a modified and renewed version of flashcards which contained decks that made learning even more fun and easier.
The company also banked on its logo which enhanced its position on the internet. Users meme-fied the logo and came up with hilarious instances where they claimed that the owl would chase you if the Spanish lesson wasn’t completed that day. This new method to interact with the customer soon gave results and the app reached its peak.
As of today, it offers 94 different courses in 23 languages. It is currently valued at $1.5 billion.
INTRIGUING BUSSINESS MODEL
But what gives the company an edge? Duo other than providing the spoken languages, also offers fictional languages like High Valyrian and Klingon, this brings enthusiastic fans and nerds right at their feet who are desperate to learn these languages.
Even though translation tools have increased in number, a simple basic fact is that they are machines. This is where Duo strikes its hammer. Duo offers the learner the text from a document to translate without them even being aware of it. The same translation is then given to other websites. This benefits all three, the learner, Duo and the client company. Therefore, Duo actually managed to devise a business model without ads and helped keeping the basic features free.
Till today the company has held 7 funding rounds with the latest one worth $10 million from General Atlantic. This is the first outside investment in the company after a gap of 3 years, giving General Atlantic an observer status in the Board.
Leading Investors of Duolingo
Duolingo’s funding has been highly tactful. In 2017, when it was almost worth $700 million, it announced a private funding of $25 million. But what is actually remarkable, is that this fund lasted for around two years. Duo didn’t even need this money. The in-app purchases were already making enough to keep the company going even when the payroll had increased with increase in operational costs too. As of December 2019, its booking subscriptions were making $100 million a year.
DUOLINGO AND ITS COMPETITORS
EdTech is a huge field so the presence of intense competition is not surprising.
Apps like Rosetta Stone, Lingvist, Mango Languages, Busuu, Babbel, Memrise, Voxy, Open English, italki, Pimsleur Unlimited, Fluenz, OpenSesame and Rocket Languages have given stiff competition to Duolingo.
Infact, no one thought Duolingo would be able to counter Rosetta Stone, but fate had something else for Rosetta.
A simple reason for this can be explained by the picture below.
General Atlantic is an investor in several other EdTech unicorns including Unacademy. Duo said that the global presence of General Atlantic would help guide the company’s growth. Atlantic also has experience in the Asian market. This is relatively new for Duolingo. This market can be extremely profitable if marketed in an efficient way. Languages like Korean and Hindi are already available as of 2020. However, this area also has the world’s most dense population groups which speak different languages.
“Because our business has been growing very fast and we have more than enough capital, there was limited need for us to raise more primary capital. However, over the last year, we developed a relationship with General Atlantic,” the company said in a statement to TechCrunch.
Duo stated that it is cash flow positive therefore, it didn’t need the $10 million as of the moment. However, their close relations with Atlantic were the basis for bringing it on the board.