The company’s shares opened at $76 on the Nasdaq, well above its IPO price of $43 per share
Shares of Bumble Inc, a company backed by Blackstone Group Inc, surged more than 76% in their stock market debut on Thursday, which valued the operator of the dating app at $14 billion.
The company’s shares opened at $76 on the Nasdaq, well above its initial public offering (IPO) price of $43 per share. The Austin (U.S.) based company operates two major apps, Bumble and Badoo, and has over 40 million monthly active users across the world.
Bumble chief executive Whitney Wolfe Herd said in an interview on Thursday that the global pandemic encouraged people to build a relationship and meet new people on their phones.
People are building meaningful relationships digitally first, and then the physical follows. This is a really phenomenal shift toward safety and engineering more accountable experiences, said Wolfe Herd, who expects the trend to continue in a post-COVID 19 world.
Bumble is unique among dating apps as it is based on a “women-first approach,” and mostly offers premium subscriptions. According to filings, the company reported $376.6 million in revenue in the first nine months of 2020. There were 1.1 million paying users on the Bumble app, while the Badoo app and other services boasting 1.3 million users.
Bumble plans to use the $2.2 billion proceeds from the IPO to pay off debt, fund international growth, and pursue acquisitions.
Right now we’re very focused on taking the dating opportunity globally, said Wolfe Herd. We also hope to have the preeminent platform for meeting whoever you’re looking for, for whatever use case, in the long run.
Blackstone acquired a majority stake in MagicLab in 2019 from founder Andrey Andreev by paying nearly $3 billion. At that time, MagicLab owned the Bumble and Badoo apps. Wolfe Herd was named Bumble’s chief executive officer after the deal.
With a strong stock market debut, Bumble also joins companies such as Snowflake Inc, Airbnb Inc and DoorDash Inc, which had a strong debut on the stock market 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.
Companies have also been pushed by investors to consider direct listing, where bankers have little influence on the price at which the stock is sold. Goldman Sachs and Citigroup are the lead underwriters for the offering.
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