Austin, Texas-based Bumble Inc., a dating app operator backed by buyout firm Blackstone Group, has announced to sell 50 million shares in its initial public offering (IPO) at $43 (approx €35.44) apiece, to raise $2.2B (approx €1.81B). The shares are trading on Nasdaq Global Select Market under the symbol “BMBL”.
According to a report, the company originally planned to sell its shares between $28 and $30 before it lifted the range to $37 to $39. The original offering plans also saw Bumble offering 34.5 million shares.
Besides, the company has also granted the underwriters a 30-day option to purchase up to an additional 7.5 million shares. Goldman Sachs and Citigroup are the lead underwriters for the offering – which is expected to close on February 16, 2021.
Youngest female CEO to ever IPO
After its IPO debut, the company’s stocks reportedly began trading up nearly 77 per cent at $76 (approx €62.68M) per share. Its shares finally closed up 63.5 per cent, giving Bumble a market cap of about $7.7 B (approx €6.34B). With this development, Bumble’s 31-Year-Old CEO Whitney Wolfe Herd became the youngest among the few women CEOs who have taken their company public. She also became a billionaire.
Use of the funds
The company will use the capital, from the issuance of 9 million shares, to repay a portion of its senior secured term loan facilities, for general corporate purposes, and to bear the expenses of the offering.
As for the proceeds from the issuance of the remaining 41 million shares, the company will purchase or redeem an equivalent number of outstanding equity interests from certain entities affiliated with Blackstone.
In 2019, Private equity firm Blackstone Group had acquired a majority stake in Bumble’s parent company MagicLab, which owned the Bumble and Badoo apps at the time, from founder Andrey Andreev. Whitney Wolfe Herd was named Bumble’s chief executive officer after the deal.
About Bumble
The Bumble app was started in 2014 by Andreev and Wolfe Herd, who previously co-founded the dating app Tinder. The Bumble platform enables people to connect and build equitable and healthy relationships.
As claimed by the company, the Bumble app is one of the first dating apps built with women at the centre, and the Badoo app (founded in 2006) claims to be one of the pioneers of web and mobile dating products. The company currently employs over 600 people in offices in Austin, Barcelona, London, and Moscow.
In a letter to investors, Herd says, “Women making the first move is a “powerful shift”. Archaic gender dynamics and old-fashioned traditions still ruled the dating world. This led to all sorts of unhealthy dynamics that ultimately disempowered women and created unnecessary pressure for men.”
According to its S-1 filing, the company generated total revenue of $376.6M in the period from January 29, 2020, to September 30, 2020, and registered a net loss of $84.1M. During the same period in 2019, the company generated total revenue of $362.6M and reported a net profit of $68.6M.
How does Bumble earn?
Bumble app is free to use, however, the app generates revenue when customers purchase premium subscriptions. With a premium account, the services give customers the ability to boost their profiles’ reach or see who’s already liked them on the app.
According to Bumble’s IPO filing, the Bumble app had about 2.4 million average Total Paying Users as of September 30, 2020, up 18.8 per cent from September 30, 2019. The app has about 12.3 million monthly active users (“MAUs”) as of September 30, 2020. Besides, the company also generates some revenue from advertising and partnerships.
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