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Duolingo and Consumer Subscription Businesses
Meanwhile, Duolingo has ~70% gross margins, with app store fees being the main cost. Note that while content isn’t included in gross margins, it is likely <10% of revenue based on the employee mix Duolingo has highlighted.
Tanay Jaipuria • Duolingo and Consumer Subscription Businesses
-Duolingo English Test (9%)
Tanay Jaipuria • Duolingo and Consumer Subscription Businesses
-Advertising and in-app purchases (18%)
Tanay Jaipuria • Duolingo and Consumer Subscription Businesses
-Subscriptions (73% of total revenue)
Tanay Jaipuria • Duolingo and Consumer Subscription Businesses
Duolingo made $162M in 2020, growing 129% y/y, and made its revenue from three sources:
Tanay Jaipuria • Duolingo and Consumer Subscription Businesses
-Great use of data and gamification to keep people engaged
Tanay Jaipuria • Duolingo and Consumer Subscription Businesses
-It is built for the mobile generation: courses are bite-sized, on-demand, and fun
Tanay Jaipuria • Duolingo and Consumer Subscription Businesses
-The content is accessible for free
Tanay Jaipuria • Duolingo and Consumer Subscription Businesses
In my opinion, a few key things are driving their incredible scale: