CNBC Disruptor 50

The education app that is making equals of Bill Gates and the world's masses

Key Points
  • The Covid-19 pandemic has led to the 500 million-download mark for Duolingo.
  • Swedish is the most popular language studied in Sweden because of Syrian refugees, while Bill Gates uses it to study French.
  • The language learning start-up was just valued at $2.4 billion by investors, which is just about $1 billion more than its valuation from just a year ago.
Duolingo Co-founders Severin Hacker (L) and Luis von Ahn (R)
Duolingo

During the coronavirus crisis, Duolingo has seen a huge spike in new users. In fact, it's become the world's most-downloaded language learning app, amassing more than 500 million downloads to date.

What many don't know is that the world's most popular education app began as a computer science project for co-founders Severin Hacker and Luis von Ahn, teaching people foreign languages while trying to simultaneously translate the entire internet. Von Ahn was one of the developers behind the invention of CAPTCHA and ReCAPTCHA, which are used to distinguish humans from machines.

But von Ahn says that what he really wanted to do was make education more accessible.

"We've always been a very mission-driven company," he told CNBC at Wednesday's Disruptor 50 Summit. "A lot of people talk about education as something that brings equality to social classes, but I always thought of it as the opposite — something that brings inequality."

Von Ahn grew up in Guatemala, where education is free and compulsory through sixth grade, or between the ages of 7 and 14. Today, there are approximately 9,300 primary schools, which are attended by 1.3 million students. More than 290,000 students attend private secondary schools, and approximately 88,000 are enrolled in university.

"What happens, particularly in poor countries like Guatemala, is that people who have money can buy themselves the best education in the world, whereas people who don't have money barely learn how to read or write," von Ahn said.

VIDEO16:4816:48
Duolingo co-founder and CEO joins CNBC's Disruptor 50 Summit

Pittsburgh-based Duolingo offers 95 courses across 38 distinct languages — from the world's most spoken, such as Spanish, French and Italian, to endangered languages like Hawaiian, Navajo and Scottish Gaelic. In addition to its core platform, the company created the Duolingo English Test, an affordable and convenient language certification option accepted by more than 2,000 universities and institutions worldwide. 

"One of the things that makes me proudest is that Duolingo really is used by the whole spectrum of society," von Ahn said. "On one end there are a lot of Syrian refugees that use Duolingo to learn the language of the country that they move to ... in Sweden, the most commonly learned language is Swedish and it's because of Syrian refugees."

On the other end of the spectrum, Bill Gates uses Duolingo to learn French.

"The same system is being used by billionaires and people who don't have very much money, which means more money cannot buy you a better education," he said.

Over the past year, the company has expanded into podcasts for Spanish and French learners and added Duolingo Plus, a subscription-based option for the app that removes ads and provides users with additional features.

In March, the company launched Duolingo ABC, a free English literacy app for children ages 3 to 6. The company originally planned to unveil the app later this year, but due to the coronavirus pandemic decided to release it early to help parents who are now working remotely and homeschooling their children. The app is free from ads and is available in the U.S., Canada, U.K., Ireland, Australia and New Zealand. It features more than 300 short lessons that teach basic reading and writing skills.

"We've been very fortunate that our growth has been organic," von Ahn said. And it's not just been organic — it's been rapid. On Wednesday, the company announced that it has raised $35 million in new funding, bringing Duolingo's private valuation to $2.4 billion. That's a sizable jump from a year ago, when a round of investor funding brought its valuation to $1.5 billion.

The company ranked No. 42 on the 2020 CNBC Disruptor 50 list, and is one of the most highly valued private start-ups in Pittsburgh history.

The round was led by General Atlantic and Durable Capital Partners — a Maryland-based investment firm founded and run by Henry Ellenbogen, who is a former portfolio manager at T. Rowe Price.

The three-time CNBC Disruptor 50 company could consider an initial public offering as soon as next year, though the timing is flexible, von Ahn said in an interview with the Wall Street Journal.