Bumble IPO priced above expected range at $43 per share

At $43 shares a piece, Bumble’s market valuation is $8.2 billion based on outstanding Class A shares listed in its filings.



PUBLISHED BY
Anna Domanska



TAGS:


2 weeks ago




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.

Subscribe to the nation’s fastest-growing CEO magazine to get the latest business news delivered to your inbox.

Avatar
Anna Domanska
Anna Domanska is an Industry Leaders Magazine author possessing wide-range of knowledge for Business News. She is an avid reader and writer of Business and CEO Magazines and a rigorous follower of Business Leaders.

Recent Posts

Accor reports $2.5 billion loss, hopeful of a recovery by next year

Accor reports $2.5 billion loss, hopeful of a recovery by next year

Accor, Europe’s largest hotel chain, reported a $2.5 billion net loss in 2020 due to the deterioration in the industry linked to the sprea...
10 hours ago
Is the sun shining again on AMC stock?

Is the sun shining again on AMC stock?

As the old adage goes, good things come to those who wait. This might come true for movie theatre operator AMC Entertainment Holdings Inc. w...
12 hours ago
HSBC turns to Asia for future growth

HSBC turns to Asia for future growth

The bank’s maximum pre-tax benefits (90%) come from its Asian business. Chairman Mark Tucker and chief executive Noel Quinn are strugg...
1 day ago
Wells Fargo to forego asset management unit to private equity for $2.1 billion

Wells Fargo to forego asset management unit to private equity for $2.1 billion

Wells Fargo has been underperforming for the past few years and has undertaken cost-cutting and restructuring to improve its numbers. Wells ...
1 day ago
Lucid Motors partners with Churchill Capital IV to go public in SPAC mega deal

Lucid Motors partners with Churchill Capital IV to go public in SPAC mega deal

Lucid Motors, the luxury electric vehicle makers, will go public with a blank-check firm Churchill Capital IV Corp in a $24 billion deal, th...
1 day ago
Aviva hives off French unit to Aéma Groupe for $3.9 billion

Aviva hives off French unit to Aéma Groupe for $3.9 billion

UK’s leading insurer Aviva Plc has sold its French unit for 3.2 billion euros ($3.9 billion), marking the biggest deal under chief executi...
3 days ago