Six New Unicorns, One Acquisition And Four Companies With 200-Plus Layoffs: How Last Year’s Next Billion-Dollar Startups Have Fared

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Forbes | Glenda Toma | May 28, 2020

Duolingo founder - Six New Unicorns, One Acquisition And Four Companies With 200-Plus Layoffs: How Last Year’s Next Billion-Dollar Startups Have FaredLast December, language-learning app Duolingo surpassed the $1 billion valuation mark, becoming the fifth company on last year’s Next Billion-Dollar Startups list to do so.

“Once we closed the funding round, a few of us early employees went for drinks and we just remembered all the early days where we had no idea where we were going to go, and we had no idea if this was even going to work out,” Duolingo CEO and cofounder Luis van Ahn tells Forbes in a video interview.

Not only did it work out, but Duolingo has been among the companies that have been gaining during the coronavirus pandemic as bored Americans take to learning Spanish, French or the 34 other languages that it offers.

Since Forbes published its 2019 Next Billion-Dollar Startups list last summer, 6 out of the 25 companies on the list, including design-software firm Figma, fintech Dave, e-commerce startup Grove Collaborative, as well as Duolingo, have reached a $1 billion valuation.

Last December, language-learning app Duolingo surpassed the $1 billion valuation mark, becoming the fifth company on last year’s Next Billion-Dollar Startups list to do so.

“Once we closed the funding round, a few of us early employees went for drinks and we just remembered all the early days where we had no idea where we were going to go, and we had no idea if this was even going to work out,” Duolingo CEO and cofounder Luis van Ahn tells Forbes in a video interview.

Not only did it work out, but Duolingo has been among the companies that have been gaining during the coronavirus pandemic as bored Americans take to learning Spanish, French or the 34 other languages that it offers.

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But it hasn’t been so easy for other companies on the list, and four startups on last year’s list faced pressures that resulted in more than 200 layoffs.

“Anything that isn’t delivering a ton of value inside the enterprise is at risk of getting cut. And anything that’s new is probably going to have a really hard time,” says Cowboy Ventures’ Aileen Lee. “Nice-to-have is going to be really hard to sell in a downturn.”

More than 50 of the 125 startups on the list since its inception in 2015 have reached or surpassed the $1 billion valuation mark either via new funding rounds, acquisitions or initial public offerings. One of the biggest winners was fintech Plaid, on the list in 2017, which agreed to be acquired by Visa for $5.2 billion in January. Honey, a browser extension that tracks prices and promo codes to help shoppers save (and a 2018 listee), meanwhile, sold to PayPal for $4 billion.

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As for Duolingo’s Von Ahn, a Guatemalan immigrant and cocreator of the Captcha program that computers use to distinguish humans from bots, the $1 billion mark was worth celebrating over drinks, but he advises other entrepreneurs to think about their businesses rather than getting obsessed with funding.

“See fundraising for what it is, which is a means to an end,” he says. “The real end is to create a company that can have impact on [its] users . . . and that can last a long time. That's the real goal. Funds help you do that.”

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