Bumble finalizes Austin-record $2.5 billion stock offering

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Austin-based Bumble has finalized the biggest initial public offering of stock in Austin history, with the dating app maker raising a total of $2.5 billion with its entry into the stock market.

© Courtesy of Dagny Piasecki, Bumble Bumble founder and CEO Whitney Wolfe Herd rang the opening bell for her company, which made a stunning debut on Wall Street on Thursday, raising $2.15 billion with its initial public offering of stock.

With the underwriters for the stock offering exercising their options to purchase 7.5 million additional shares,  Bumble sold a total of 57.5 million shares at $43 apiece.

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Bumble had made a dramatic debut last week on Wall Street, raising $2.15 billion with at the opening of its IPO. And from its opening price of $43, Bumble’s shares soared more than 80%, rising as high as $79.60 the first day. The shares ended the first day at $70.31 – up $27.31, or 63.5%, from the opening price. The company’s market cap on its first day was estimated at about $14 billion. 

Bumble’s shares were trading at about $74 per share on Thursday. 

“We look forward to building the future of love, friendship, networking, and community as we chip away at archaic gender dynamics and make the internet a kinder, and more accountable place. I want to thank the remarkable women who paved the way for Bumble by supporting and championing each other; we can break down barriers for the next generation of women and other marginalized communities,” Bumble CEO and founder Whitney Wolfe Herd said last week

In a securities filing, Wolfe Herd said the company has the potential to become a “preeminent global woman’s brand” and be a place to meet new people.

The company operates two apps, Bumble and Badoo, which have more than 40 million users each month. The business started as a dating app and has expanded into a women-centric social networking platform that has since added friend and business networking options. As of September, the company’s apps have 2.4 million paying users in more than 150 countries, according to the securities filing. The company also said it has 42 million monthly active users as of the third quarter of 2020.

The company’s IPO total and opening valuation were significantly higher than competitor Match Group, which was valued at $2.9 billion when it went public in 2015. Match Group is the parent company of a number of dating platforms including Match.com, Tinder, Plenty of Fish, Hinge, and OkCupid.

Blackstone Group purchased the majority of Bumble and its parent company of the same name in 2019 in a deal that valued the company at about $3 billion.  The group now owns about 67% of the outstanding economic interests in Bumble and controls 83% of the outstanding voting power. Wolfe Herd owns about 11% of outstanding interests in Bumble and controls 14% of the voting power, according to the company’s securities filings. Based on the value of her shares, Wolfe Herde is likely now a billionaire.

Bumble generates revenue through a subscription model on its app, which also offers free features and charges for additional services. Wolfe Herd has said previously that the company was profitable since its second year.

According to company filings, Bumble saw revenue of $376.6 million during its first nine months of 2020 and reported a net loss of $84.1 million. That compares with the first nine months of 2019, when the company reported revenue of $362.6 million and a profit of $68.6 million. For 2019 in total, the company reported $488.9 million in revenue.

Bumble president Tariq Shaukat told the American-Statesman last week that the IPO was a great milestone for the company.  He said the company is still in its “early innings” on the dating side of the product as well as its friendship and business products, and has lots of room to continue to grow globally. 

“We think there’s a lot of opportunity,” Shaukat said. “There’s a lot of ways that we’re serving users. People don’t compartmentalize their life. You have this pandemic of loneliness happening in the world, you’ve got a lot of people who are really trying to find more and more ways to connect, and we want to be there to help them out in all facets of their life and of their life cycle.” 

Bumble’s IPO is among the biggest deals of the year so far and follows a recent trend of megadeals, or IPOs valued over $1 billion. In January, financial technology company Qualtrics raised $1.55 billion, and Affirm Holdings raised $1.2 billion.

Companies led by women and people of color still see significantly less investment and are less likely to go public.  Wolfe Herd is one of the few female founders who have led a company to an IPO. In January, Business Insider reported that only about 20 female founders have led a company to an IPO since 1817 when the New York Stock Exchange was founded. 

This article originally appeared on Austin American-Statesman: Bumble finalizes Austin-record $2.5 billion stock offering

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