DuoLingo, the US-based language learning platform developer backed by internet and technology group Alphabet, went public yesterday in a $521m initial public offering on the Nasdaq Global Select Market.
The company issued 3.7 million class A shares while its shareholders sold just over 1.4 million class B’s. They were priced at $102.00 each, above a $95 to $100 range already increased from $85 to $95. It shares closed at $139.01 on their first day of trading yesterday.
Founded in 2011, Duolingo has built an app with 40 million monthly active users who can learn any one of 40 languages through the use of games. The platform uses artificial intelligence to assess each user and tailor the education to their abilities.
The company’s net loss rose slightly to $15.8m in 2020 but its revenue more than doubled to nearly $162m in the same period. The offering comes after $183m in funding.
CapitalG, the Alphabet unit then called Google Capital, led a $45m series D round for DuoLingo in 2015 that also featured existing investors Union Square Ventures (USV), New Enterprise Associates (NEA), Kleiner Perkins Caufield & Byers (KPCB), Ashton Kutcher and Tim Ferris.
Drive Capital led the company’s $25m series E round in 2017, valuing it at $700m. That valuation more than doubled to $1.5bn in late 2019 when CapitalG provided $30m in series F funding.
DuoLingo raised a further $35m from Durable Capital Partners and General Atlantic in a November 2020 deal valuing it at $2.4bn, while USV sold part of its stake through the transaction.
CapitalG sold $36.3m of class B shares in the offering that will be converted to class A’s, and has come out with 13% of DuoLingo’s class B shares. NEA spinoff NewView Capital Fund remains its largest shareholder, with 21.3% of those shares.
USV sold $75.6m of shares and retains 12% stake of the class B’s and KPCB is selling $13.9m and will emerge with 10.5%, while General Atlantic will come out with 7.5% of the class B’s.
Lead bookrunners Goldman Sachs and Allen & Company, bookrunners BofA Securities, Barclays Capital, Evercore Group and William Blair, and co-managers KeyBanc Capital Markets, JMP Securities, Piper Sandler and Raymond James have a 30-day option to buy nearly 766,000 more shares, potentially lifting the IPO to over $598m.
