A good number of language learning apps were developed at first as websites, only to evolve to their mobile-first format after apps rose in popularity. Currently, mobile apps are one of the default formats that learners expect to have available when deciding to study a language online.
Language learning apps’ popularityThe mobile e-learning market size is forecasted to reach 19.5 billion U.S. dollars by 2026, up by more than 148 percent from 2019. However, numbers could be larger than previously expected, due to the impact of the 2020 coronavirus pandemic driving the unprecedented growth in e-learning and language learning apps usage.
Between 2020 and 2021, the popularity of language learning apps increased due to users’ desire to engage in meaningful activities while sheltering at home during the pandemic. While back-to-school and pre-holiday months had usually registered higher peaks of users’ engagement, the pandemic presented a unique scenario that encompassed language learning apps’ seasonality. In April 2021, the leading language learning mobile apps generated more than 24 million U.S. dollars in in-app purchase revenues from users worldwide, with market leader Duolingo accounting for close to 46 percent of the total.
Despite the recent growth, some high -profile language learning apps took a hit in August 2021, when the access to the Chinese market was partially restricted by the country’s latest regulation on foreign companies in the education sector. Apps like Duolingo and Memrise have since disappeared from the app stores available in China but are still available on iOS.
Language learning apps on the public marketIn July 2021, Duolingo went public on Nasdaq with a valuation of nearly five billion U.S. dollars, becoming one of the few publicly traded digital language learning companies. In 2020, Duolingo reported revenues for almost 162 million U.S. dollars, up by 128.5 percent year-over-year. The company's, which was founded in 2012 by Luis von Ahn and Severin Hacker, reported net losses of close to 15.8 million U.S. dollars in 2020, an increase of roughly 16 percent from the previous year.
In March 2021, Berlin-based Lesson Nine advanced the possibility of wanting to go public on the Frankfurt stock exchange. Lesson Nine is the parent company of language learning platform Babbel, which first launched in 2008 as a website. In 2019, Babble generated almost 124 million euros in revenues, while the company’s net loss amounted to three million euros, down from the 12.4 million euros lost the previous year.
Duolingo vs Babbel: different products, different monetization strategiesDespite the limited share of Duolingo users who choose to pay for advanced features on the app, 73 percent of the company’s 2020 revenues were generated by subscription plans. Duolingo makes usage of a highly gamified environment in which language acquisition is presented as a progressive climb to a final prize. The app offers an engaging experience, with users participating in “strikes” to meet their daily and weekly goals, under the vigilant eye of Duo, Duolingo's official mascot. Duolingo adopts a freemium monetization strategy, leaving users with the possibility to interact with many basic functionalities on the app while also offering paid subscriptions and in-app purchases.
By comparison, Babbel positions itself as a more traditional digital language course, with conventional dialogues and exercises focused specifically on grammar. While the platform provides a free trial period, Babbel's monetization method focuses on selling long-term subscription plans to users, as well as limiting in-app advertising to maximize users' experience.