Bumble Inc. seeks love in the public markets as the operator of the popular dating app of the same name prepares for its initial public offering. The company is expected to make its debut on the Nasdaq on Thursday, in an IPO that could raise about $ 2.2 billion. Bumble BMBL, has a portfolio of products aimed at giving women more power in their various relationships, a core tenet of the company’s eponymous dating app that requires women to take the first step when talking to potential suitors.
Since launching the dating app Bumble in 2014, the company has branched out into other forms of relationship hunting. He now operates Bumble BFF, a section of the Bumble app aimed at finding platonic friendships, and Bumble Bizz, a branch aimed at locating professional network connections. “By empowering women in all of their relationships, we believe we have the potential to become a preeminent global women’s brand,” said CEO Whitney Wolfe Herd on the company’s virtual investor tour. Bumble competes against Match Group Inc. MTCH, the powerhouse of online dating, + 7.68%, which runs several dating brands, including Tinder, co-founded by Wolfe Herd. Match Group is valued at more than $ 40 billion. The company plans to sell 50 million shares through its offering, with a share price of $ 43 each. That positions Bumble to raise $ 2.2 billion. Bumble increased its offer twice and raised its expected price, after originally saying it planned to sell 34.5 million shares at $ 28 to $ 30 each. Investors will be able to slide shares under the symbol BMBL. Here’s what to know about the next initial public offering. The Bumble Umbrella At the corporate level, Bumble operates two brands. The company manages the Bumble portfolio, which houses the dating, friendship and networking platforms of that name, and also operates Badoo, a popular dating app in Europe and Latin America. The Bumble brand has over 12 million monthly active users, and one focus right now is growing the non-dating areas of that business. “We plan to begin investing in marketing and products and develop a monetization strategy for Bumble BFF, Bumble Bizz and other potential new categories,” the company said in its prospectus. Bumble and Badoo are linked through their corporate past. When Blackstone acquired a majority stake in MagicLab, which operated both brands, in 2019, Badoo founder Andrey Andreev sold his stake to Blackstone and stepped down as CEO of Magic Lab, explained MKM Partners analyst Rohit Kulkarni. Wolfe Herd kept her stake and became the CEO of the company. Badoo has more than 28 million monthly active users and “primarily attracts a global emerging middle class,” Wolfe Herd said on the investor tour. “While both apps are focused on empowering fair and healthy relationships for everyone, we have a great opportunity due to the different audiences each app serves,” he continued. Finding Your Niche While Match operates a broad portfolio of dating brands, Bumble has a more limited portfolio, but also a more limited focus on features that it says can help drive more equitable relationships. The eponymous dating app Bumble requires women to take the first step when speaking to partners, an element that carries over to the company’s business networking app as well. Bumble expands on that concept later in its prospectus, saying that women “tend to be the main decision makers in the home” with an estimated purchasing power of $ 30 trillion worldwide, creating an opportunity for a business. like Bumble “built specifically with women in mind”. Speaking at Bumble’s virtual investor roadshow, Wolfe Herd argued that relationships often have “archaic gender dynamics that disempower women and … put pressure on men,” while the culture of online interactions in general can be harmful. “We think the dating platforms were neglecting women,” he said, something Bumble intended to address. The company cites third-party data saying it has a higher ratio of female to male users compared to the market average and that its users are more likely to pay for the service compared to the market average. Love and Money Bumble generated revenue of $ 416.6 million during the first nine months of 2020, compared to $ 362.6 million in the same period last year. The company posted a loss of $ 118.5 million during the first nine months of 2020, compared to a net income of $ 54.0 million in the comparable period of the prior year. Although Bumble is free to use, the company generates revenue when customers purchase premium subscriptions, giving them access to features like the ability to increase the reach of their profiles or see who has already liked them on the app. The company also generates some revenue from advertising and partnerships. The company had 2.4 million average paying users at the end of September 2020, up from 2.1 million at the end of September 2019. MKM’s Kulkarni noted several positives he saw in the company’s finances, including earnings before interest, taxes and depreciation. and amortization margin (Ebitda) of 26%, and an expansion of the company’s gross margin. In his view, the negatives include a slowdown in growth during the pandemic. The backstory There is a messy story between Bumble and Tinder, where Wolfe Herd once worked. Wolfe Herd founded Bumble after co-founding Tinder, which he later sued for sexual harassment and other accusations. The parties finally reached an agreement. Match, which owns Tinder, sued Bumble in 2018 alleging patent and trademark infringement. That litigation was also resolved. Match allegedly tried to acquire Bumble over the years, but was unsuccessful in those efforts. See more: Tinder and Bumble will never be a match, and Match may be better for that Match’s Tinder also announced three years ago that it planned to launch a female speaking first option on its own platform, allowing women to have the choice of whether or not they wanted to start all new conversations with matches. Big Tech Threat Not only Match and its group of dating brands pose a potential threat to Bumble’s business. Bumble points out in its prospect’s risk factors that it markets and distributes its app through third-party publishers like Facebook Inc. FB, + 0.90%, which has its own online dating service. The company also cites risk from Apple Inc.’s AAPL, a new -0.46% OS change, which requires users to opt-in before their “identifier for advertisers” (IDFA) is shared with marketers. IDFA allows marketers to better target their ads, so depending on the speed at which users choose not to share their information, there could be an impact on the effectiveness of mobile ads in Bumble apps, which could affect what marketers are willing to pay. Opinion: Apple’s privacy changes are affecting more than just Facebook The company also pointed out how Apple and Alphabet Inc. GOOGL, + 0.53% GOOG, + 0.57% Google take “a significant portion (usually 30%) of revenue that we receive from transactions processed through in-app payment systems, ”something that sparked outrage from many developers, including Match and Epic Games, the creator of Fortnite.