Duolingo, a U.S. edtech startup, announced a revised IPO price range this morning, raising its potential per-share value to $100 from an initial target of $95 per share. According to SEC filings, Duolingo is now aiming for an IPO price range of $95 to $100 per share, up from $85 to $95 per share, or a gain of about 12% at the bottom and 5% at the top.
TechCrunch as a “bellwether” for the greater U.S. edtech ecosystem previously described the Duolingo debut; if Duolingo can price and trade well, private-equity investors may be more inclined to invest, given a more proven and attractive exit market. Duolingo, on the other hand, might throw a wet blanket over the startup edtech market if it values or trades poorly.
The fact that Duolingo is increasing its IPO price range suggests that a good offering is more likely than a bad one. It is fantastic news for tech startups that have achieved unicorn statuses, such as Masterclass, Course Hero, Quizlet, and Outschool. According to Crunchbase data, those companies have raised $461.4 million, $97.4 million, $62 million, and $130 million, respectively.
Aside from the planned price, the terms of the company’s IPO have remained the same. As a result, Duolingo will continue to sell 3.7 million shares in its initial public offering, with existing shareholders selling 1.41 million shares. The company’s underwriters also retained the right to purchase 765,916 shares of the company’s stock at the IPO price for the next 30 days.
The company’s straightforward valuation, excluding underwriter shares, currently falls between $3.41 billion and $3.59 billion at the upper and lower bands of its IPO price. These figures grow to $3.48 billion and $3.67 billion when the greenshoe offering factored in. Duolingo’s November 2020 Series H valued the firm at slightly over $2.4 billion when it was private. As long as Duolingo maintains its pricing range, investors will see a nice increase in the value of their investment. Duolingo was valued at $1.6 billion in mid-2020, meaning that its value had more than doubled since then.