Bumble Inc, a dating app business, has raised nearly $8 billion in an Initial Public Offering (IPO) Wednesday at $43 shares apiece. The Bumble IPO’s target range was raising $2.2 billion by selling 45 million shares at a target price of $37-$39. This itself was upsized from a previous bandwidth of 34.5 million shares priced at $28-$30.
Bumble sold a majority stake to Blackstone in 2019 in a $3 billion deal. At the IPO price, the company now has a market capitalization of $8.2 billion based on the total number of shares outstanding.
Bumble IPO: Everything you need to know
Bumble founder Whitney Wolfe Herd received a $125 million payout following a complex reorganization of the dating app’s parent company, according to a regulatory filing ahead of its initial public offering.
The filings also revealed a $119 million loan to an entity she controlled, which can raise questions about conflicts of interest later.
Bumble also has an app named Badoo, which is popular in Europe. Dating apps have done well despite the pandemic-induced lockdown, as apparently people have turned to online messaging for romance.
Bumble focuses on the experience of women on its dating apps, tapping into the growing market for online matchmaking services. The company reported 42.1m monthly active users at the end of September, of which about 2.4 million were paying users.
Bumble said it expects to record up to $541.5 million in revenue between January and December 2020, up 11% from the prior year driven by growth in paying customers. It has $900 million in debt. In the first nine months of 2020, Bumble reported revenues of $417m, an increase of 14.9 percent from the same period in 2019, but slower than the 35.8 percent revenue growth it reported from 2018 to 2019.
The company said it planned to use proceeds from the offering to repurchase shares from pre-IPO owners and pay down debt. Bumble’s private owners will retain about 97 percent of the company’s voting rights following the offering.
Bumble has been embroiled in legal hassles, and trouble with top leadership recently. Ms Wolfe Herd was installed as chief executive following allegations of a toxic work environment under former head Andrey Andreev. He was the co-founder of the app. Andreev exited the company after selling his stake to BlackStone.
Bumble was founded in 2014 by Wolfe Herd after an acrimonious departure from rival app Tinder, which she had co-founded.
Wolfe Herd had sued Tinder alleging that her co-founders subjected her to sexual harassment. Tinder parent Match Group Inc denied the allegations but paid about $1 million to settle the dispute.
In 2018, Bumble rejected a $450 million acquisition offer from Match. Then Match filed a lawsuit against Bumble alleging intellectual property infringement. Bumble counter-sued accusing Match of fraud and trade secrets theft. Both lawsuits were later dropped that same year.
Bumble’s shares are due to begin trading on the Nasdaq under the symbol “BMBL.” Goldman Sachs and Citigroup are the lead underwriters for the offering.
The app dating space is highly competitive. Tinder, OkCupid and Match, and Bumble will now face further competition as social media group Facebook rolls out its own dating service to its 2.7 billion users.
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