Duolingo reaches $6.5B valuation on day of IPO • Hacker News Board

Re: Duolingo reaches $6.5B valuation on day of IPO

#21

Post by paxys » Thu, Jul 29, 2021, 5:32 AM UTC

poorjohnmacafee wrote: post #3

Quick look at financials, they lost $25M in trailing 12 months, lost $14M in the previous year, lost $10M in the year before. How is Duolingo supposed to become profitable? How is a $6.5B valuation justified?

Why is this always the comment whenever any startup or IPO is discussed on this site? Every company at this stage loses money. It would be stupid to chase profits over user or revenue growth. They have 40 million monthly active users. Registrations grew 67% YoY. Their revenue doubled in a single quarter. Expenses are mostly stock comp. They have nearly $200M cash on hand. The numbers are all solid.

Re: Duolingo reaches $6.5B valuation on day of IPO

#22

Post by dep_b » Thu, Jul 29, 2021, 5:33 AM UTC

Some of it’s statistics were pretty interesting, like the huge amount of Arabic speaking people that wanted to learn Swedish.

Re: Duolingo reaches $6.5B valuation on day of IPO

#23

Post by chillingeffect » Thu, Jul 29, 2021, 5:36 AM UTC

vncecartersknee wrote: post #4

Honestly from using duolingo pretty heavily for a couple of years, attending language classes and doing my own individual study I've found duolingo pretty useless. It's "fun" and gives one the sense of progress without really accomplishing much.

having just returned from mexico for 2 wks i can say the pace of duolingo is waaaay to slow compared to conversation.

Re: Duolingo reaches $6.5B valuation on day of IPO

#24

Post by mgh2 » Thu, Jul 29, 2021, 5:37 AM UTC

vncecartersknee wrote: post #4

Honestly from using duolingo pretty heavily for a couple of years, attending language classes and doing my own individual study I've found duolingo pretty useless. It's "fun" and gives one the sense of progress without really accomplishing much.

Its UX is good enough to gamify the starting language learning process, but that is where it stops - novice excitement

Re: Duolingo reaches $6.5B valuation on day of IPO

#25

Post by Areading314 » Thu, Jul 29, 2021, 5:38 AM UTC

vncecartersknee wrote: post #4

Honestly from using duolingo pretty heavily for a couple of years, attending language classes and doing my own individual study I've found duolingo pretty useless. It's "fun" and gives one the sense of progress without really accomplishing much.

I can't agree more. I made some progress on Japanese only to find that when I spoke it was completely incomprehensible to a native speaker. I think speech/pronunciation correction is still an unsolved problem.

Re: Duolingo reaches $6.5B valuation on day of IPO

#26

Post by selectodude » Thu, Jul 29, 2021, 5:39 AM UTC

paxys wrote: post #21

poorjohnmacafee wrote: post #3

Quick look at financials, they lost $25M in trailing 12 months, lost $14M in the previous year, lost $10M in the year before. How is Duolingo supposed to become profitable? How is a $6.5B valuation justified?

Why is this always the comment whenever any startup or IPO is discussed on this site? Every company at this stage loses money. It would be stupid to chase profits over user or revenue growth. They have 40 million monthly active users. Registrations grew 67% YoY. Their revenue doubled in a single quarter. Expenses are mostly stock comp. They have nearly $200M cash on hand. The numbers are all solid.

>Every company at this stage loses money

The company is ten years old. I would have to imagine almost zero companies lose money ten years in because they literally do not exist anymore.

Re: Duolingo reaches $6.5B valuation on day of IPO

#27

Post by TurkishPoptart » Thu, Jul 29, 2021, 5:40 AM UTC

I would short this stock.

Re: Duolingo reaches $6.5B valuation on day of IPO

#28

Post by jtsiskin » Thu, Jul 29, 2021, 5:42 AM UTC

poorjohnmacafee wrote: post #3

Quick look at financials, they lost $25M in trailing 12 months, lost $14M in the previous year, lost $10M in the year before. How is Duolingo supposed to become profitable? How is a $6.5B valuation justified?

growth rate. low customer acquisition cost. the expenses weren't from marketing, which is good.

My biggest concern would be how much of the growth was from people having free time at home due to covid. And if deep learning will make language learning less relevant in the future. You may be less likely to learn a new language if audio can be translated in real time almost perfectly

Re: Duolingo reaches $6.5B valuation on day of IPO

#29

Post by throwawaysea » Thu, Jul 29, 2021, 5:43 AM UTC

Reminder that Duolingo’s IPO is very accessible to the public via Robinhood. I am very surprised to see the high valuation for them but it may also be because an uneducated public is trying to get in on something they feel is attractive only because they recognize the name. They may be in for a shock if the stock plummets soon after, especially since there are disincentives for flipping the stock if you bought into the IPO.

Re: Duolingo reaches $6.5B valuation on day of IPO

#30

Post by paxys » Thu, Jul 29, 2021, 5:44 AM UTC

selectodude wrote: post #26

paxys wrote: post #21

Earlier quoted context omitted.

Why is this always the comment whenever any startup or IPO is discussed on this site? Every company at this stage loses money. It would be stupid to chase profits over user or revenue growth. They have 40 million monthly active users. Registrations grew 67% YoY. Their revenue doubled in a single quarter. Expenses are mostly stock comp. They have nearly $200M cash on hand. The numbers are all solid.

>Every company at this stage loses money The company is ten years old. I would have to imagine almost zero companies lose money ten years in because they literally do not exist anymore.

Average time to IPO for tech companies is 7-8 years, so ten years without a profit for a VC-backed company is not at all unusual. Palantir is coming up on 20.