Shares of online-dating company
jumped 64% in their trading debut Thursday amid huge interest in matchmaking apps and new public offerings.
The Austin, Texas, company’s stock closed at $70.31, valuing it at roughly $13 billion, based on the share count in the company’s prospectus. Its initial public offering was priced at $43 a share, raising $2.2 billion for Bumble.
Whitney Wolfe Herd
started Bumble in 2014 to turn the traditional dating dynamic on its head. Bumble was created as a platform on which women make the first move. The app also has an option for users seeking same-sex interactions.
Ms. Wolfe Herd had earlier co-founded
Match Group Inc.’s
Tinder. The 31-year-old has said she saw the problems with archaic dating rules and sought to change them.
The Bumble parent said it plans to use most of the proceeds to pay down debt, as well as buy back shares from its pre-IPO stakeholders. Among its early backers is private-equity giant
Blackstone Group Inc.,
which bought a majority stake in the company in 2019.
Following the IPO, and assuming the full exercise of underwriters’ option to offer more shares, Blackstone’s stake is expected to shrink to about 47%, according to a prospectus.
The company also owns Badoo, founded by
in 2006. Mr. Andreev sold his stake in the company to Blackstone in 2019 and stepped down from his role as CEO of Bumble’s predecessor parent company.
Bumble, Badoo and other apps operated by the company had more than 40 million monthly users as of Sept. 30, it said.
Bumble makes money through in-app purchases offering premium features that aren’t available on the free version, such as the ability for a user to change their location to another city before a trip and additional control over who can see their profile.
In January 2020, the company decided to stop maintaining certain platforms including Chappy, Lumen and Huggle to focus on Bumble and Badoo. It said it doesn’t expect material revenue associated with those inactive platforms and expects selling and marketing expenses to decline significantly.
For the first nine months of 2020, the company swung to a loss of about $118.5 million from a profit of $54 million in the comparable period in the prior year as expenses ballooned.
It generated roughly $416.6 million in revenue, up from $362.6 million in the same nine months the year before.
The IPO market has been on a tear, with high-profile debuts of companies including
late last year. There has also been an avalanche of new special-purpose acquisition companies, with dozens of the so-called blank-check vehicles looking for targets to merge with.
Bumble joins rival Match, which also owns dating apps Hinge and OkCupid, on the public market. Match unsuccessfully tried to acquire Bumble, and it later sued Bumble in 2018 for infringing patents for “swiping” and other features that have made Tinder popular.
Bumble called Match a “bully” and filed a $400 million lawsuit in response.
The two companies in June 2020 said they settled all litigation between them.
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Appeared in the February 12, 2021, print edition as ‘Shares of Date App Bumble Soar 64% In Debut.’