Wall Street’s First Date with Bumble

An IPO for the History Books

Bumble (BMBL), the dating app known for requiring women to make the first move in its heterosexual matches, went public yesterday. The company initially priced shares at $43, but the stock was up about 63% at the end of the trading day.

Bumble was founded in 2014 by its current CEO Whitney Wolfe Herd. Yesterday, Wolfe Herd, 31, became the youngest woman founder to take a US company public. 559 companies have gone public over the past year in the US, but only three, including Bumble, were founded by women.

Competition from Match Group

Bumble’s main competition comes from Match Group (MTCH), the publicly-traded dating app conglomerate which owns Tinder, Hinge, OkCupid, and other online dating platforms. As of September 2020, Bumble saw its user growth climb by 19% year-over-year. Match Group saw user growth of 12% during the same period. Match Group has a market capitalization of about $45.5 billion while Bumble’s share of the market is much smaller.

In discussing its relationship with Match Group’s apps, Bumble’s leadership emphasizes that the online dating space is not a “winner-take-all” industry, because most people use multiple dating apps at once. Bumble has advantages over some competitors because of its unique model, as well as its other non-dating offerings like Bumble Bizz and Bumble BFF.

Bumble’s Business Model

Like most of Match Group’s holdings, Bumble uses a “freemium” model. Users can join the app and swipe for free, but they can also pay for upgrades like Bumble Boost which costs $12.99 per week and Bumble Premium which costs $17.99 per week. These paid options allow users to make their profiles more prominent or view people who have liked their profiles. The bulk of Bumble’s revenue comes from these offerings, but the company also generates money from advertising and paid partnerships.

As of September 30, Bumble had 12.3 million monthly active users. With its new capital, the company plans to work on encouraging those users to buy more add-ons and premium subscriptions. Today investors showed Bumble love, and Wall Street will be eager to see how the relationship progresses.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS21021201