United States securities and exchange commission logo





                               May 27, 2021

       Luis von Ahn
       Chief Executive Officer
       Duolingo, Inc.
       5900 Penn Avenue
       Pittsburgh, PA 15206

                                                        Re: Duolingo, Inc.
                                                            Draft Registration
Statement on Form S-1
                                                            Submitted April 30,
2021
                                                            CIK: 0001562088

       Dear Dr. von Ahn:

              We have reviewed your draft registration statement and have the
following comments. In
       some of our comments, we may ask you to provide us with information so
we may better
       understand your disclosure.

              Please respond to this letter by providing the requested
information and either submitting
       an amended draft registration statement or publicly filing your
registration statement on
       EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
       believe an amendment is appropriate, please tell us why in your
response.

             After reviewing the information you provide in response to these
comments and your
       amended draft registration statement or filed registration statement, we
may have additional
       comments.

       Draft Registration Statement on Form S-1 Submitted April 30, 2021

       Summary, page 6

   1.                                                   We note your disclosure
that you are the "category leader in digital language learning"
                                                        and that Duolingo is
the "leading mobile learning platform globally." Please provide
                                                        support for these
assertions and explain if your leadership is based on objective criteria
                                                        such as market share or
revenue, or other metrics.
 Luis von Ahn
FirstName  LastNameLuis von Ahn
Duolingo, Inc.
Comapany
May        NameDuolingo, Inc.
     27, 2021
May 27,
Page 2 2021 Page 2
FirstName LastName
Risk Factors
We rely on third-party platforms such as the Apple App Store and the Google
Play Store..., page
22

2.       Please disclose the material terms of any agreements with Apple and
Google from
         which you generated 51% and 19% of your revenue in 2020, respectively.
Discuss the
         terms and termination provisions in those agreements. Tell us whether
you intend to file
         those agreements as exhibits.
Selected Consolidated Financial and Other Data
Consolidated Statements of Operations Data, page 69

3.       Your unaudited pro forma net loss per share calculation includes an
adjustment for the
         assumed conversion of stock based awards. Please clarify if you are
referring to RSUs that
         will vest upon the effectiveness of your initial public offering
(IPO). Otherwise, please
         further clarify the awards to which you are referring and the
conversion terms. Please also
         disclose the compensation expense that will be recognized with any
awards that vest upon
         the effectiveness of your IPO and tell us how you considered including
this as an
         adjustment to the numerator in your calculation of pro forma net loss
per share.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Subscription, page 76

4.       Disclose the renewal rates and any known material trends related to
renewal rates for each
         of the subscription plans for all periods presented. We note your
disclosure that
         subscribers on your annual subscription plan tend to stay on our
platform longer and are
         stickier than subscribers on our monthly plan.
Paid Subscribers, page 78

5.       Please clarify whether paid subscribers includes monthly subscribers
in a given year that
         are no longer active at the end of the measurement period. In
addition, clarify whether a
         user that purchases multiple 1-month subscriptions is counted as a
single paid subscriber,
         or multiple subscribers.
Maintaining Efficient User Acquisition and Strong Unit Economics, page 82

6.       You disclose that gross margin, coupled with your primarily organic
acquisition model,
         leads to strong unit economics. Please clarify how your organic
acquisition costs impact
         your unit economics differently than your non-organic acquisition
costs and also how
         these costs impact your overall results differently.
Key Factors Affecting Our Performance
Ability to Expand Lifetime Value of Subscribers, page 82

7.       Please clarify how you measure lifetime value for a subscriber and any
significant
 Luis von Ahn
FirstName  LastNameLuis von Ahn
Duolingo, Inc.
Comapany
May        NameDuolingo, Inc.
     27, 2021
May 27,
Page 3 2021 Page 3
FirstName LastName
         assumptions or limitations involved with the calculation of this
metric.
Our Expansion into New Geographic Markets, page 83

8.       You disclose that as you expand into certain new geographies, you may
see an increase in
         learners who prefer to access premium features through your in-app
purchase options
         rather than through your subscription packages or who prefer to
consume your free app
         with an increased advertising load and that you may also see a lower
propensity to pay as
         you enter certain markets. Tell us how you considered disclosing MAUs,
DAUs and paid
         subscriber by geographical region as well as average advertising
revenue per user and
         average subscription revenue per paid subscriber in each region, so
that investors can
         better understand the trends in your business.
Results of Operations
Revenues, page 87

9.       We note your subscription revenue increased 114% for the year ended
December 31, 2020
         as compared to the year ended December 31, 2019. However, your
disclosure on page 79
         indicates that paid subscribers increased 84% during this period.
Clarify if there was also
         an increase in subscription prices for the period or any other factors
that caused revenue to
         increase by a greater percentage than paid subscriber growth.
10.      We note your advertising revenue increased 91% for the year ended
December 31, 2020
         as compared to the year ended December 31, 2019. However, your
disclosure on page 78
         indicates that MAUs increased 34% and DAUs increased 58% during this
period. Clarify
         if there was also an increase in price per ad during this period or
any other factors that
         caused revenue to increase by a greater percentage than MAU and DAU
growth. Also, tell
         us how you considered disclosing number of ads delivered and number of
advertisers as of
         the end of each period.
Business, page 95

11.      Please disclose the material facts and underlying assumptions that
support your statement
         that there are over 1.5 billion people learning a new language
worldwide representing a
         market worth approximately $50 billion For example, clarify whether
this figure
         represents the number of people learning a new language online.
Certain Relationship and Related Party Transactions, page 140

12.      Please identify the parties to the Investors' Rights Agreement, Voting
Agreement, Right of
         First Refusal and Co-Sale Agreement and the Indemnification
Agreements.
Principal and Selling Stockholders, page 142

13.      Please disclose the natural person or persons who exercise the voting
and/or
         dispositive powers with respect to the securities owned by entities
such as General
         Atlantic (DU), L.P.
 Luis von Ahn
FirstName  LastNameLuis von Ahn
Duolingo, Inc.
Comapany
May        NameDuolingo, Inc.
     27, 2021
May 27,
Page 4 2021 Page 4
FirstName LastName
Consolidated Financial Statements
Notes to Consolidated Financial Statements
3. Revenue, page F-13

14.      You disclose that users have the ability to download limited content
offline. However, as
         there is a significant level of integration and interdependency with
the online
         functionality, you consider the service to be a single performance
obligation for the online
         and offline content. Please further clarify the nature of the offline
content, the stand-alone
         functionality it has, and the benefits the user can derive without the
online functionality.
         Please also clarify the nature of the integration and interdependency
with the online
         functionality. Tell us how the online functionality customizes or
modifies the
         functionality of the offline content or significantly enhances its
capabilities. Please also
         clarify whether the offline content is sold or can be downloaded
separately from your
         subscription services. Refer to ASC 606-10-25-21.
15.      You disclose that you do not enter into contracts with a customer that
contain multiple
         promises that result in multiple performance obligations. Clarify if
you enter into
         contracts with the same customers at or near the same time with
respect to purchases of
         subscription services, Duolingo English tests, and in-app virtual
goods and how you
         considered whether they should be accounted for as a single contract.
Refer to ASC 606-
         10-25-9.
16.      We note that revenue from Rest of World comprised 56% and 53% of total
revenue for
         2020 and 2019, respectively. Please tell us how you considered further
disaggregating
         revenue in this category by country or geographic region.
9. Stock-Based Compensation, page F-21

17.      Please include the fair value of your common stock used in the
determination of the fair
         value of your options with the assumptions that you disclose for each
period presented.
18.      When your preliminary IPO price is known, please reconcile and explain
the differences
         between the fair values of the underlying equity interest determined
on each grant date,
         including the difference between the most recent grant date fair value
and the midpoint of
         your offering range. Describe the objective evidence that supports
your determination of
         the fair value of the underlying equity interest at each grant or
issue date. Please provide
         this analysis for the most recent six months. In addition, your
disclosure should fully
         describe the assumptions utilized at the IPO valuation date that are
significantly different
         than those used in the most recent valuation.
General

19.      Please supplementally provide us with copies of all written
communications, as defined in
         Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
         present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
         not they retain copies of the communications.
 Luis von Ahn
Duolingo, Inc.
May 27, 2021
Page 5

       You may contact Laura Veator, Senior Staff Accountant, at (202) 551-3716
or Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Matthew Derby, Staff
Attorney, at (202) 551-3334 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.



                                                          Sincerely,
FirstName LastNameLuis von Ahn
                                                          Division of
Corporation Finance
Comapany NameDuolingo, Inc.
                                                          Office of Technology
May 27, 2021 Page 5
cc:       Alison Haggerty
FirstName LastName