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Duolingo is one of the world’s most popular language-learning platforms, offering free lessons in over 40 languages. But with millions of users accessing the app for free, you might wonder how Duolingo actually makes money. The company’s business model revolves around multiple revenue streams, including premium subscriptions, advertising, and language proficiency tests. In this article, we’ll explore the different ways Duolingo generates income while keeping its core service free.

1. Duolingo Plus Subscription

One of the primary ways Duolingo makes money is through its premium subscription service, Duolingo Plus. While the core language-learning app is free, Duolingo Plus offers users an enhanced experience for a monthly or yearly fee.

The key benefits of Duolingo Plus include:

• Ad-Free Experience: Duolingo Plus users don’t see any ads, making for a more streamlined learning experience.
• Offline Lessons: Users can download lessons and access them offline, allowing them to continue learning without an internet connection.
• Unlimited Hearts: Duolingo’s free version limits the number of mistakes users can make before they have to wait for their “hearts” to refill. With Duolingo Plus, users get unlimited hearts, allowing them to make more mistakes and progress faster.

Duolingo Plus costs around $6.99 to $12.99 per month, depending on the subscription plan. With millions of active users, a significant portion of Duolingo’s revenue comes from Plus subscribers.

2. In-App Advertising

For users who stick to the free version of Duolingo, the platform generates revenue through in-app advertising. Ads are displayed between lessons, and Duolingo earns money based on impressions and clicks. This advertising model allows Duolingo to offer its core language-learning service for free while still generating income.

• Banner and Video Ads: Between lessons, users are shown banner ads or short video ads. Duolingo partners with advertisers, who pay for ad space within the app. Users can opt to watch video ads to earn extra hearts and continue their lessons.
• Native Ads: Duolingo also displays native ads that are less disruptive and fit seamlessly into the app’s interface, encouraging higher engagement rates from users.

With millions of daily active users, ad impressions add up to a significant revenue stream for the company, especially for users who engage with the app regularly.

3. Duolingo English Test (DET)

Another key revenue stream for Duolingo is the Duolingo English Test (DET), which offers an affordable and accessible way for non-native English speakers to prove their English proficiency. The DET is particularly popular among international students who need to demonstrate their English skills for admission to universities and other academic programs.

The test is conducted online and can be taken from anywhere in the world, making it a convenient alternative to traditional tests like the TOEFL or IELTS. The cost of the Duolingo English Test is around $49, significantly cheaper than its competitors.

The DET is accepted by thousands of universities and institutions worldwide, and its growing popularity has made it a valuable revenue stream for Duolingo.

4. Corporate Partnerships and B2B Solutions

Duolingo has also ventured into the B2B (business-to-business) space by offering language-learning solutions for corporate clients. Many businesses invest in language training for their employees, especially those operating in international markets.

Through corporate partnerships, Duolingo provides customized language-learning programs that help employees improve their language skills in a flexible, scalable way. While not as widely known as Duolingo’s consumer offerings, these corporate deals contribute to the company’s revenue.

5. Language Certification

In addition to the Duolingo English Test, Duolingo offers language certification programs for other languages. As the app expands, it aims to provide proficiency certifications that could be used in various professional and academic settings. Offering language certifications as a paid service could become an even more significant revenue stream for Duolingo in the future.

• Proficiency Badges: Duolingo allows users to earn badges and certificates as they progress through the lessons. In the future, these certificates could be monetized as official documents for language learners who want to prove their proficiency in professional environments.

6. Crowdsourced Content and Volunteer Contributions

While not a direct source of revenue, one of the ways Duolingo manages to keep costs low is by relying on a crowdsourced model for developing new language courses. Many of the platform’s courses are created by volunteers and language enthusiasts who help build and refine content.

This crowdsourcing model reduces the costs of developing new courses, allowing Duolingo to expand its language offerings without the need for expensive in-house teams.

7. Investors and Public Offering

In 2021, Duolingo went public on the Nasdaq Stock Exchange, raising significant capital through its initial public offering (IPO). The company’s stock, listed under the ticker symbol DUOL, became one of the highest-profile IPOs of that year. By going public, Duolingo gained access to additional funds, which it has used to expand its platform, invest in new features, and further grow its user base.

While stock market investments are not part of Duolingo’s core revenue streams, the funds raised through the IPO and investor support contribute to its overall financial stability and growth.

Conclusion

Duolingo’s business model is built on multiple revenue streams, allowing the company to offer free language education while generating income through premium subscriptions, advertising, and language proficiency tests. By balancing free and paid services, Duolingo has managed to maintain its status as a popular and accessible platform for millions of language learners worldwide. With ongoing innovations and a focus on expanding its paid offerings, Duolingo is well-positioned to continue growing its revenue in the years to come.