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Duolingo reaches $6.5B valuation on day of IPO

reuters.com

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

#31

Post by greesil »

Areading314 wrote: post #25
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.

I took foreign language courses in high school and college. I couldn't actually communicate until moving to the country where they spoke it and living there for six months. Then I had to go back home :(

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

#32

Post by jonas21 »

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?

1. So it looks like they lost $14M on revenue of $71M in 2019, and $16M on revenue of $162M in 2020. Revenue more than doubled YoY, which is impressive. Costs also grew (by a smaller percentage), but they're presumably spending a lot to chase after the growth opportunity and can dial back later.

2. They had positive free cash flow of $14M in 2020, which may be a better metric to look at when assessing their financial health.

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

#33

Post by scrooched_moose »

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 find their approach of "drag and drop these 6 words to form a sentence" or "fill in the missing word in this sentence" was just leading me to recognize correct patterns of letters, not words or meaning.

"aog" always goes after "Lor" and before "san" (obviously made up example) - I couldn't tell you what the individual words meant or what the full sentence said; but I knew that those groups of letters belonged in that order.

I'm also a lapsed B2 in German and played around with that course a few years ago. 3 or 4 weeks ago I got an email that they finally accepted my correction on a blatantly incorrect translation, which had apparently been unfixed in one of their most popular courses for years.

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

#34

Post by monkeybutton »

vncecartersknee wrote: post #16
ngokevin wrote: post #10

Earlier quoted context omitted.

I'm trying a language learning startup and surveyed a lot of people. The response is universal that everyone's tried Duolingo, and it didn't work for them in actually learning, despite monster streaks. I think it's masterful as a dopamine machine and employing habit building tactics. Perhaps it's a good icebreaker for people in language learning, as long as people are resourceful enough to look beyond Duolingo.

That's cool I'd love to hear more about it, I've actually been thinking about ways that a language app could work better. Seems like all the current research is that "immersion" in the target language is critical, an app that just played me conversations, had me read text, etc and 'creatively' formulate responses, not just simply fill in the missing word, obviously in increasing difficulty would be ideal.

Immersion provides the strongest motivation to learn and to try. When you want something or have a problem that needs to be solved and the other party doesn't speak English, you're going to be very motivated. The 'dopamine hit' from getting it right and communicating successfully in another language is also way better than from an app/game. The results are just so much more real and tangible.

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

#35

Post by mdorazio »

daxaxelrod wrote: post #9
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.

My personal experience leads me to disagree. I've been using Duolingo to learn Chinese for about 400 days now. I recently took another step and started taking private zoom lessons and my tutor said a few of her students have come from the same path. Duo has given me a good understanding of sentence structure and raw vocabulary. Even though my pronunciation needs work, Duo has given me so much for watching a few ads a…

I learned Chinese in college and then lived in China for a year and a half. Personally, I think sentence structure and basic (spoken) vocabulary are the easiest parts of Chinese since there's no real conjugation and particles do all the heavy lifting instead of messing with word forms [1]. The hard parts are memorizing a decent number of hanzi and properly pronouncing with tones. I tried duo to learn some Japanese and found it... not great.

[1] Note: Personally, I find Chinese superior to romance languages in this regard - it was actually really refreshing as a learner.

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

#36

Post by mrweasel »

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.

There’s a ton of companies which exists solely to burn other peoples cash.

I think VC funding makes IPOs a bit more confusing. It makes sense to IPO, if you need to money to boost your business. Duolingo needs money to update their app, so they can use the IPO to fund it.

The problem is that if you’re VC funded it now looks like the VCs have lost faith in the company. They paid for the bill for ten years and now they won’t help push the company into profitability? That makes an IPO look like an exist strategy.

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

#37

Post by tomduncalf »

BooneJS wrote: post #5
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 moved on to Babbel.

Yeah I used Babbel to pick up some basic Italian a few years ago and thought that while a bit more “boring” than Duolingo, I felt like I was learning more useful stuff. It’s structured more like a language class at school.

Memrise is worth a look as a Duolingo alternative. It’s similar but feels a bit more “serious”, there are some nice features like you get videos of native speakers saying phrases with a variety of accents.

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

#38

Post by selectodude »

paxys wrote: post #30
selectodude wrote: post #26

Earlier quoted context omitted.

>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.

>Palantir is coming up on 20.

Palantir is a dumb shitty company that will file for bankruptcy. Unfortunately the VCs have already dumped it on to the dopes on Wall Street bets.

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

#39

Post by Semaphor »

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.

It’s useless for properly learning a language. For getting the basics of a language in a game-y way that doesn’t feel like studying, it’s great. My wife managed to pass her German A1 (CEFR [0]) exam almost completely by just using Duolingo. She took some free Deutsche Welle exam prep courses in the week before, but to even get to the level to understand those, she used Duolingo.

If you need to learn a language quickly, I’d call it the wrong tool. If you are okay spending time properly studying a language, I’d say that will be better. But for certain cases, Duolingo is great.

[0]: https://en.wikipedia.org/wiki/Common_European_Framework_of_R...

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

#40

Post by Uberphallus »

Duolingo is great to get your feet wet, but its teaching model doesn't scale past A2/B1 levels (and in speaking/listening even less so). This valuation is enormous for a company that's virtually been for 10 years in losses.

So far Duolingo has made the experience more painful to free users to push them to pay, and yet hasn't managed to get out of the red. I think the main that most learners are from developing countries learning English, so Duolingo Plus can be a hard sell.

I bet the money influx will help push whatever projects they have in mind, but while private, and I say this as a language learning ethusiast, their approaches have been completely misdirected. Personally I'd be wary to throw my money there, but will certainly reevaluate it next quarter.

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