April 27, 2024

Cyprus Mail
BusinessInternational

Soaring IPO of dating app ‘Bumble’ mints 31 year old female Billionaire

By Reuters News Service01541
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Shares of Bumble Inc, backed by Blackstone Group Inc, soared more than 76 per cent in their stock market debut on Thursday, fetching a $14 billion valuation for the operator of the dating app where women make the first move.

The company’s shares opened at $76 on the Nasdaq, well above its initial public offering (IPO) price of $43 per share.

Bumble joins the ranks of Snowflake Inc, Airbnb Inc and DoorDash Inc, all of which had strong first-day pops when they debuted last year.

Stellar first-day trading gains such as these are likely to fuel criticism from some venture capital investors, including Benchmark’s Bill Gurley, who has argued that investment banks underprice offerings so their investor clients can win big in first trades.

Some investors have also pushed companies to consider direct listing, where bankers have little influence on the price at which the stock is sold.

Austin, Texas-based Bumble was founded in 2014 by Whitney Wolfe Herd, a co-founder of rival app Tinder, which she left earlier that year.

The explosive IPO saw Herd become self-made female billionaire at just 31. Her net worth is currently $1.5 billion.

In 2019, Blackstone paid about $3 billion to acquire a majority stake in MagicLab, which owned the Bumble and Badoo apps at the time, from founder Andrey Andreev. Wolfe Herd was named Bumble’s chief executive officer after the deal.

Wolfe Herd, 31, had sued Tinder alleging that her co-founders subjected her to sexual harassment. Tinder parent Match Group Inc, which denied the allegations, paid about $1 million to settle the dispute.

A court fight, however, broke out in 2018 after Bumble rejected a $450 million acquisition offer from Match. Match had filed a lawsuit against Bumble alleging intellectual property infringement. But Bumble counter-sued two weeks later accusing Match of fraud and trade secrets theft. Both lawsuits were later dropped that same year.

Goldman Sachs and Citigroup are the lead underwriters for the offering.

 

 

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