Flo vs Duolingo. Comparing metrics and valuation.
Consumer subscription apps at scale
Flo - period-tracking app - recently raised $200 million at $1B valuation. The company's co-founder and CEO shares some of the metrics on his Linkedin from time to time.
I was interested in comparing the valuation of Flo and Duolingo - both consumer apps monetizing with subscriptions on the app stores at a significant scale. I picked some numbers from the company's releases, Techcrunch articles, and the company's CEO posts on Linkedin. I've added the data from Duolingo's latest quarterly report. Some numbers are rounded or estimated, so might be slightly off. However, the purpose was to provide a high-level comparison of the growth rate, scale, and valuation multiple.
Flo had around 68 million MAU (monthly active users) at the time of the raise, up from 54 million a year earlier. So the user growth rate is ±25%
The number of paid subscribers is 5 million. Revenue estimated at $200M.
Here is the side-by-side comparison of the main metrics, revenue, growth, and valuation. Flo is valued at 5x revenue, while Duolingo is valued at a whopping 17x revenue.
Why the difference? There could be several explanations. Overall, a 17x revenue multiple for any business is high and raises concerns about whether it can be sustained, and if the company can deliver the expected growth. One bad quarterly report could send shares down and lead to a significant adjustment in the valuation.