Digital Strategist and Consultant, Growth Hacking Specialist worked for both startups & big brands.
Education has always had a significant impact on people around the world. We all remember the memories from kindergarten through high school. And it is not easy to forget our memories from college to the start of your working life. Even though we consider education to be a one-room and a red-brick schoolhouse, it has evolved. Education now is a booming industry that has already seen immense growth and is still rapidly expanding.
Companies and investors in this industry know and recognize all the various trends that continue to help in the growth. And that is also why many substantial educational companies are not just growing but going public as well. In this article, we will talk about the rise of EdTech unicorns and the Duolingo IPO.
Many EdTech startups are launched every day. And a lot of them end up failing as they did not learn from the mistakes and the success of other education companies in the industry. But when it comes to EdTech unicorns, not all startups can be called unicorns (you can see Eqvista's complete list of 2021 unicorns here).
Let's begin by talking about the industry, and then we will define what an EdTech unicorn is.
The EdTech industry is a vast and rapidly growing one. You can find every kind of company here, from startups and middle-market companies to even public companies. The companies in this industry are not only getting the attention of veterans but also from general investors too. We all know that there are three key education categories including:
With technology infused in all these parts, a learner is always in contact with technology. And each of these sectors has its own sub-segment in the industry. Moreover, each category is different and has unique buyers, end-users, and funding mechanisms. The growth of each has been shared below:
In short, the EdTech industry is actually very vast and growing every day.
EdTech is basically the practice of introducing IT tools in education to make learning more engaging, inclusive, better, and for an individualized learning experience too. With this said, what is a "unicorn?" "Unicorn" in the business world and VC world describes a privately held startup that has a value of $1 billion or more. This term was coined by Aileen Lee, the founder of Cowboy Ventures. So, how do we differentiate an EdTech unicorn from the rest?
Well, the first step is to check all the startups to see which ones are EdTech unicorns and which are not. To explain better, some startups have a value of more than $1 billion, like Roblox. But this company has its feet in different industries and not just in the EdTech one. So you need to identify the handful of companies both in the Education and Technology industry with a value of over $1 billion.
There are many recognizable EdTech unicorn startups in the world. Here are the top 10 that you should know:
Out of these, we will be talking about Duolingo and its decision to go public through an IPO.
Duolingo is a Pittsburgh-based company that offers language learning resources and tools via its mobile app, website, and assessment platform. Anyone can easily learn up to 40 languages through Duolingo. The company was started in 2011 by a computer science professor named Luis Von Ahn with his postgraduate student, Severin Hacker. This professor also started the bot-detection company - CAPTCHA, which was sold to Google. He then decided to start this company to solve the problem of expensive language courses for everyone.
The company grew over the years till it finally became a unicorn in 2019. It has about 10 million users and is rapidly increasing. And now, in July 2021, the company went public, changing the face of the EdTech industry. Now, Duolingo has some 300 million global users of its technology. This has also led the company to have about 1k global employees and about $161 million in revenue!
Duolingo has been growing rapidly since it entered the scene in the EdTech industry. It has raised a lot of funding till now and has hundreds of millions of users, thanks to its free language resources. And with all the rapid growth, the company decided that it was time to go public. And on 28th July 2021, under the ticker DUOL, the company went public on Nasdaq. The company has raised about $521 million through the sale of 5.1 million shares during the IPO. The price of the shares at this time was $141.40 a share. This also brought the value of the company to $5 billion after the sale.
Thanks to this step taken by the company, it has changed the face of the EdTech industry. Although EdTech companies are growing and people value education, Duolingo has just shown that not only do tech companies have the way to reach the top, but also the EdTech companies. It has given hope to many others that their growth doesn't have to stop, and they too can conquer it all.
With all these changes in the EdTech industry, we can expect more extraordinary things to come ahead for the industry. But two topics have the most impact - online learning and emerging technologies. Both these trends have been talked about briefly below:
EdTech is a diverse and enormous industry that keeps growing. In fact, this industry will keep growing as people will never stop learning. And this opens a new gate of opportunities for everyone, as we have seen with the Duolingo IPO. If you are planning to start an education company, then this is a good time. And if you already have one, then you are in luck as you can pitch to investors and gain more expansion.
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