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Duolingo Inc. shares jumped more than 38% Wednesday after the language-tutorial app company priced its initial public offering well higher than its original forecast.
Duolingo
DUOL,
shares opened at $141 Wednesday on the Nasdaq, after pricing at $102 late Tuesday, pushing its valuation higher than $5 billion. The language-learning program priced above the forecast range of $95 to $100 a share, which had already been raised from the original estimate of $85 to $95 a share.
For more: Duolingo, the fast-growing language-learning app, files for IPO
Duolingo planned to sell 5.1 million shares in the offering, but will only receive proceeds from the sale of 3.7 million, so the company would receive about $377.4 million of the total $520.2 million raised. At $102 a share, the company commanded a valuation of at least $3.7 billion with 35.8 million shares outstanding.
The Pittsburgh-based company offers a “freemium” service in which most of its users do not pay for its offerings, a mobile-focused software approach to learning foreign languages. The company said revenue more than doubled to $161.7 million in 2020 from $70.8 million in 2019. In the quarter ended March 31, the company reported $55.4 million in revenue compared with $28.1 million in the year-ago period.
The offering involves Class A stock, which is worth one vote a share, while early investors own Class B shares, which are worth 20 votes apiece. Of Class B shareholders, NewView Capital will have 20.8% voting power after the offering. The co-founders, Chief Executive Luis von Ahn and Chief Technology Officer Severin Hacker, will have 15.3% and 15.2% of the votes, respectively. CapitalG will have 12.7% of votes, Union Square Ventures will have 11.7%, Kleiner Perkins 10.3%, and General Atlantic 7.3%.
The company has raised $183.3 million in venture funding since 2011, according to Crunchbase.
Over the past 12 months, the Renaissance IPO ETF
IPO,
has gained 48%, compared with a 37% gain in the S&P 500 index
SPX,
and a 42% rise in the tech-heavy Nasdaq Composite Index
COMP,
