Duolingo enters ‘major leagues’ with $6.5 billion valuation in strong debut

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Language learning app Duolingo notched a valuation of $6.5 billion after its shares surged nearly 40% in the company's Nasdaq debut, becoming the latest education technology start-up to impress Wall Street.

Duolingo's stock opened at $141.4 per share, blowing past the IPO of $102 per share, which crossed the top end of its target range. The stock later pared some gains to trade at $130.92 in the afternoon.

The company's flotation comes at a time of increased investor interest in the edtech space, after pandemic restrictions sent students and teachers from the classroom to the web.

"Being a public company will allow us to operate at a higher level, and get going from the minor leagues to the major leagues," said Luis von Ahn, co-founder and CEO of Duolingo.

Following the IPO, the company will focus on improving its flagship app and getting more active users to switch to paying subscribers, von Ahn said. Duolingo offers courses in 40 languages to about 40 million monthly active users.

The company also plans to expand more in Asia, its fastest growing region.

Currently, Duolingo's largest market is the United States, home to 20% of its users and bringing in 45% of the company's revenue, von Ahn said.

Duolingo raised nearly $521 million in the IPO by selling about 5.1 million shares. Almost 1.4 million of those shares were sold by existing stockholders and the proceeds will not go to the company.

Earlier this week, the company raised its price target range to between $95 and $100 per share, from an earlier estimate of between $85 and $95 per share.

The company was founded in 2011 by von Ahn and Severin Hacker, who met at Carnegie Mellon University.

Goldman Sachs & Co and Allen & Company are the lead underwriters for the IPO.

The team at Platform Executive hope you have enjoyed this article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Niket Nishant in Bengaluru and Echo Wang in New York. Editing by Devika Syamnath.

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