Duolingo: A High-Conviction Contender in the EdTech Arena
Exploring the potential of Duolingo as a valuable addition to a concentrated investment portfolio.
Introduction
I only bet big when the odds are in my favor.
That’s not just a principle — it’s the core of my investment philosophy.
I don’t build a diversified portfolio. I build a concentrated one. A handful of asymmetric bets with limited downside and substantial upside. Bets where, if I’m right, the payoff changes my financial future.
So when a company like Duolingo grabs my attention, I slow down.
I study. I dig. I ask myself: Is this just another fast-growing tech stock? Or is this a rare compounder — a category-defining business worth holding through cycles, through volatility, through noise?
Let’s find out.
Duolingo’s Value Proposition: More for Less
The key to asymmetric investing is value per dollar spent.
In other words: how much real, tangible, compounding value is a customer receiving for each dollar they spend on the product? Duolingo nails this.
Most people still don’t fully grasp what Duolingo has done. They’ve turned education — something traditionally expensive, boring, and exclusive — into something free, fun, and universal.
You can learn a language. Practice math. Even start exploring music. All on a gamified platform that feels like a mix between an app and a video game — and for most users, it’s free. Those who pay do so for convenience, ad-free access, and faster progress. But the value even before paying is exceptional.
This is a product that offers 10x more value than it charges. That’s the kind of product that wins.
Massive Customer Growth — With Serious Engagement
Duolingo isn’t just growing — it’s accelerating.
The number of people using the app daily has exploded. The number of paying subscribers is increasing fast. And here’s the kicker: the retention is strong. People stick with Duolingo.
That’s because they’ve cracked something most edtech companies never could: they made learning addictive.
Learning, by its nature, is hard. Most apps fail because they’re boring or overwhelming. But Duolingo applied game design principles to education. Users earn streaks, compete with friends, get bite-sized lessons, and receive immediate feedback. That stickiness creates behavior change. And behavior change is where real value lives.
This isn’t just an app — it’s a habit machine.
Why Young People Love Duolingo
Duolingo has one of the strongest brands among Gen Z and younger Millennials. Walk into any school, university, or youth hostel around the world — people know the green owl.
It’s fun. It’s non-threatening. It’s free.
Duolingo is what happens when a brand becomes culturally relevant and delivers utility. It’s not a gimmick — it’s genuinely useful. And for a younger generation raised on phones, with short attention spans and a desire to learn on their own terms, Duolingo fits like a glove.
And this matters deeply. Because if the product becomes embedded in a generation’s learning behavior, its lifetime value multiplies. These aren’t just users. They’re long-term customers and referrers.
Founder-Led, Mission-Driven
I like founder-led companies. I like companies that care about more than just hitting quarterly numbers. And I like teams that combine ambition with intelligence.
Duolingo checks those boxes.
Luis von Ahn, the co-founder and CEO, isn’t just a founder — he’s a visionary. He has a track record of building technology with massive global reach. He understands scale. He understands product. And more importantly, he understands why education matters.
Duolingo isn’t chasing gimmicks or chasing trends. It’s executing on a long-term vision: to make the best education in the world accessible to everyone.
That’s a mission that scales.
And under the hood, they’re innovating rapidly. They’re using AI to generate better lessons. They’re building new subjects. They’re cutting costs by automating where others would hire. This isn’t a bloated tech company — it’s a lean, mission-driven growth engine.
Rich Valuation — But Winners Are Rarely Cheap
Let’s talk about the elephant in the room: valuation.
Duolingo trades at a high multiple. It’s expensive by almost every traditional metric. But here’s the thing — companies like Duolingo should be expensive.
Winners are rarely cheap. And if they ever become cheap, it’s probably because something’s broken.
The real question isn’t, “Is it cheap?”
The real question is, “Is it worth it?”
Is the business compounding value at a rate that justifies a premium? Is it still early in its growth cycle? Does it have a moat, a sticky product, strong leadership, and untapped market opportunity?
If the answer is yes, then valuation becomes less of a barrier — and more of a feature.
Buying a compounder early means accepting a premium. That’s the price of potential.
Could Duolingo Fit Into My Portfolio?
I only make a few bets. That’s the discipline. My capital goes where the upside is massive and the downside is controlled.
Duolingo is now officially on my radar. Not because it’s popular. Not because it’s growing. But because it has the ingredients of an asymmetric bet:
It offers more value per dollar spent than almost any other education product.
It’s deeply sticky — with accelerating growth, high retention, and cultural relevance.
It’s founder-led with a long-term mindset and product-first DNA.
It’s expanding into new verticals, increasing TAM without losing focus.
It has pricing power, brand power, and habit-forming potential.
But I’m not in yet. I need to learn more. Dig deeper. Understand the nuances — the cost structure, the user cohorts, the competitive threats, the hidden risks.
Because before I bet big, I want to know that the odds are in my favor.
This write-up is the beginning of my research. I’ll be studying Duolingo intensely over the next weeks. And if it passes my filter — if I see the same asymmetric profile I saw in other big winners — I’ll be ready to act.
Final Thoughts
Education is one of the most broken, overpriced industries in the world.
Duolingo is rewriting the rules. And when someone rewrites the rules of a global industry — and does it with software margins, founder vision, customer love, and culture-defining brand power — I pay attention.
Because that’s not just a cool company.
That’s a potential 10x.