What Duolingo’s Massive IPO Pricing means for EdTech startups

“I think another trend we have already seen is that lifelong learning is going to be standard. Hence, the success of Duolingo and Coursera and all these other edtech companies that have focused on education regardless of what your age is, regardless of where you are in life. Being able to serve the types of people pursuing education and knowledge across market demographics is going to be key.”

Hussainatu Blake, JD, Creator & Co-Host Edtech Web Series “Twinfold with Hassa & Hussa”

While startups in China’s edtech landscape face challenging futures following the government’s crackdown on the companies, the environment for those in the U.S. seems to have taken a positive turn as mobile language learning app Duolingo secured strong IPO pricing at the end of July.

Duolingo secured a valuation of $6.5 billion after its shares surged nearly 40 percent in the company’s Nasdaq debut. The language app’s stock opened at $141.40 per share—markedly higher than its initial public offering price (IPO) of $102, allowing the company to cross into the top end of its target range. The stock later pared some gains and settled at $130.92.

The edtech startup is also upping the ante on its artificial intelligence tools. The newest version of the app’s question-scheduling algorithm, called Birdbrain, is aimed at deeper engagement for users. The company announced in August its plans to deploy increasingly better algorithms for smarter vocalizations aimed at creating a more natural vocal effect for a platform that has sometimes been criticized for sounding robotic.

We spoke with an expert knowledgeable in international technology and education to learn the significance of the massive IPO pricing, and what this might mean for Duolingo and edtech startups operating more broadly in the U.S.

Hussainatu Blake, JD, Creator and Co-Host Edtech Web Series “Twinfold with Hassa & Hussa”
Hussainatu Blake serves as creator & co-host of an edtech web series, “Twinfold with Hassa & Hussa.” She is also an adjunct professor of business law at Baltimore City Community College.

Blake has built her expertise in edtech, working in the private and public K-12 sector. Previously, she served on the Board Relations team for Pearson’s online and blended learning department. In addition, for 10 years, she was co-founder and vice president of a global edtech nonprofit Focal Point Global, where she developed cross-cultural edtech programming for youth in the US, Cameroon, Gambia, Namibia, and South Africa.

Prior to her career in edtech, Blake was an international development professional and has previously worked for the International Organization for Migration’s (IOM) Counter-Trafficking Department in South Africa. Blake was born in Limbe, Cameroon and raised in Baltimore, Maryland.

Blake earned a bachelor’s degree in international relations and German studies from Tufts University and her master’s degree in international policy studies from Middlebury College’s Monterey Institute of International Studies. She also holds a JD from Atlanta’s John Marshall Law School.

OnlineEducation.com: Duolingo recently secured strong IPO pricing at the end of July. What is the major significance of this massive IPO pricing? What could this pricing mean for edtech startups operating more broadly in the U.S.?

Blake: So, I think first and foremost this is amazing for U.S. edtech companies, especially a U.S. edtech company that does not have such a foothold in the Asian market. To have this type of valuation is a big deal because as we all know the Asian market is where we see the big prize when it comes to edtech companies.

This is an especially important valuation for this company as it is not San Francisco-based or Silicon Valley-based—it’s Pittsburgh-based, so this is major.

On top of that, we often forget that Duolingo is really mobile and is a mobile service type company. To have this type of valuation for an edtech startup that really has grown and has a mobile type of business is major. It’s a shift away from edtech companies that have come before in that they are thinking about the flexibility and growth to their services and to their product.

OnlineEducation.com: Meanwhile, China recently cracked down on its own tech and education sectors, while several Indian edtech startups have been securing acquisitions and fundings. At a macro level, what are some major trends or changes you’ve seen in the edtech startup environment globally?

Blake: I think the biggest trend and challenge in edtech is data privacy. Obviously, as edtech continues to grow, it’s dealing with children’s information, private information, details of people’s information. You know, data privacy is a challenge we’re seeing at both international and domestic levels in the U.S.

For example, Howard University had to shut down for a day because of a cyberattack. The importance of securing data, especially for people of a certain age, is going to be of more and more importance.

I think another trend we have already seen is that lifelong learning is going to be standard. Hence, the success of Duolingo and Coursera and all these other edtech companies that have focused on education regardless of what your age is, regardless of where you are in life. Being able to serve the types of people pursuing education and knowledge across market demographics is going to be key.

Another trend is immersive technology. Everyone knows there are online service offerings, so finding different ways to engage learners and teachers (if there is a teacher in that specific circumstance) is going to be key. Involving immersive technology into the learning process via AR/VR is going to be a trend that people are going to want to look at. People want to smell and touch, not just see and hear when they are learning. So I think that is going to be a trend to look out for.

And then the next trend I think is going to be really addressing some of the key issues that learners face. And that different populations face. For example, student debt, test scores—types of technology really addressing and solving those issues.

The last thing I would say about that would be basically that people understand hybrid learning models will be a necessity. When you do have access to online learning, these hybrid learning models are going to be key. People are going to need in-person and online learning will be the emerging trend.

We have seen that 100 percent remote or online learning may not be the healthiest option, and then also we know that some people don’t have access to the internet, wifi, etc. at all times. They need some type of form, model, or format that addresses that and a hybrid learning model is going to be a necessity.

OnlineEducation.com: Are there any variations regionally or locally for these startups and emerging edtech trends we should know about?

Blake: When speaking about trends it’s important to remember there are issues of varied learning styles and abilities. Variation in learning access applies not only when we talk about poverty or rural versus urban, but we’re also talking about learning disabilities and types. We’re talking just about how people learn in general.

So when we talk about these trends and how they may vary in different regions, they vary on local levels within these regions as well. It’s not just discussing being in a rural setting without consistent access to wifi. It’s also talking about within those underserved communities there are still learning disabilities and issues around how people learn in general. So that’s an important variation to note.

It’s not unique to any given country but is something that is a global issue that regardless of where you are we have to address. And unfortunately, when we see certain things in edtech, the people who benefit from it are often not the ones who need the most access to it. We’ll continue to see that divide until we start to see groups address how people access these educational tools and also when certain edtech companies begin to address varied learning capabilities of the people who don’t typically learn in the standard fashion.

OnlineEducation.com: While there are many innovations coming out in the edtech space, what do you find to be the most exciting opportunity or innovation on the horizon for the industry? And what will be the main challenges to startups in the space moving forward?

Blake: The innovation that I see really emerging and that I’m excited to see is what’s coming out of the virtual reality and augmented reality space in edtech.

It’s starting to become more mainstream and I think people are becoming more aware of these glasses and tools that can provide a virtual experience. But I’m thinking beyond just a three-dimensional visual. I’m thinking about the sense of smell. I’m thinking about sounds and textures, things you can touch. I’m excited about things that people are not yet thinking about on a major level.

The challenge will be implementing that across tools and bringing it to people in a larger fashion.

So I think that is the innovation that I am really excited to see. I’m excited about edtech having people immerse themselves in the learning experience that they are given in the future.