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The Edtech giant Duolingo set an initial price range for its impending IPO today. The Unicorn expects its public debut to be between $ 85 and $ 95 per share, selling $ 3,700,000 as part of the deal.
1,406,113 other shares are sold by existing shareholders and 765,916 shares are offered to subscription banks as part of the transaction. In total, the company could see 5,872,029 shares traded when it went public, valued at $ 557,842,755. Duolingo itself can raise up to $ 424,262,020 in gross proceeds at its current range, provided its underwriting banks exercise their option.
The IPO is an important fundraising event for the company. Prior to its public offering, the biggest shot of capital Duolingo raised was a $ 45 million Series D from 2015.
Let’s take a look at what Duolingo, which we’ve described in more detail here, is worth at its IPO price and take a look at its preliminary second quarter results. Our objective will be to understand its valuation in the context of its growth. From there, we will be able to draw some general conclusions about the larger edtech startup market.
What is it worth?
After its IPO, Duolingo will have 35,892,152 shares outstanding, without the option of its subscriber. At the lower and upper limits of its simple IPO valuation, Duolingo is worth between $ 3.1 billion and $ 3.4 billion.
As with any company that goes public, the valuation of Duolingo’s IPO increases if we include the shares that were vested as RSUs or options, but have not yet been exercised. In Duolingo’s case, its number of shares stands at 43,776,271, according to an initial TechCrunch analysis from the company’s RSU and option details provided in its S-1 filing. At that number of shares, Duolingo is worth between $ 3.7 billion and $ 4.2 billion.
For each number provided, the option of the company’s subscriber is added modestly.
All of the valuations listed above are a premium over the company’s final private price set in its November 2020 Series H funding round. This $ 35 million round valued the company at around $ 2.4 billion. of dollars.
At first glance, then, the price range for the company’s IPO looks solid, whether we rely on a simple or fully diluted number of shares to come up with a new price for the company. But how do his new valuations compare to his recent earnings? Let’s find out.
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