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AI-Powered Language Learning App Duolingo Nets $45 Million Funding

This article is more than 8 years old.

Gearing up to become an automated personal tutor for students trying to learn a language, Duolingo today said it has raised an additional $45 million in funding.

The latest round, led by Google Capital along with previous investors Union Square Ventures, NEA, and Kleiner Perkins Caufield & Byers, values the Pittsburgh-based maker of a popular language learning app at $470 million. That's a substantial valuation for a company that so far is pinning most of its business on $20 English language proficiency certifications.

CEO Luis von Ahn, who has sold two previous companies to Google, plans to use the money to extend Duolingo's "learning platform" even more to become something of a personalized tutor driven by a branch of artificial intelligence called machine learning. "Because human tutors are scarce and expensive, we are using technology to give everyone access to a personalized education in a scalable way," he said in a statement.

Duolingo's approach differs greatly from the much more common method of watching videos to learn a language. Its system makes something of a game of the learning experience, providing a "strength bar" that indicates how well a concept has been learned. Then the company uses the data generated from each person's work to determine what lessons come next. The lessons can be done in sessions of a few minutes at a time.

In an email, von Ahn explained that Duolingo’s original goal was to "offer free language education for the world. Now, we’re focused on offering the best possible education to the maximum number of people in the world." So it's working now to "optimize the rate at which people acquire information, making the experience as entertaining as possible to help students persist, and we’re using machine learning to offer personalized learning experiences to each of our users."

Besides von Ahn's previous connections to Google, the search giant's investment fits, given its overt focus on using machine learning to improve its own products. "Duolingo's mobile-first, adaptive, and gamified platform is changing the way people are learning languages across the world," said Laela Sturdy, a partner at Google Capital, the company's growth equity fund.

Duolingo is partly known for combining its language learning app with a crowdsourced service that does translations for the likes of CNN and Buzzfeed. But about a year and a half ago, the company started deemphasizing that business. Von Ahn said Duolingo decided to double down on being an education company, and translations would have required more investments in people and quality control than would have been worthwhile.

Instead, the company settled on satisfying its users' demands for a less expensive English certification exam required by employers. Duolingo created a "test center" that charges $20, less than a tenth of the typical costs, and tests that can be done at home via a mobile phone.

The company is cagey on what other businesses it might get into, but suggested that there are "interesting avenues to explore" especially with the test center. But there may be other possibilities to make money from the free (for now?) Duolingo for Schools program that it launched in January. A fast-growing base of more than 100 million users is an asset worth something, too, and while Duolingo won't speculate, advertising or subscription services are always possibilities.

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