Dating App Bumble IPO Hits $2.15 Billion, A Win for Women Founders
Bumble Inc., a women-owned dating app recently raised $2.15 billion in its initial public offering. The company is set to expand the size of its listing and shares pricing above a marketed range.
The offering was led by Goldman Sachs Group Inc., Citigroup Inc., Morgan Stanley, and JPMorgan Chase & Co. Bumbles shares began trading on Thursday on the Nasdaq Global Select Market under the ticker BMBL.
The company sold 50 million shares at $43 per share on Wednesday. It also plans to sell additional 45 million shares at $37 to $39 per share, a target which was raised from 34.5 million shares at $28 to $30 per share.
The dating service has a market value of about $8.2 billion thanks to the outstanding Class A shares listed in its filings. Blackstone Group, a private equity firm, holds a majority stake in Bumble’s parent company. The transaction occurred in 2019 and was valued at $3 billion.
According to the company’s filings for the nine months that ended September 30, the Texas-based Bumble saw a pro forma net loss of $28 million attributable to owners and shareholders, on revenue of $413 million.
The Bumble dating service was founded and launched in 2014 by CEO Whitney Wolfe Herd, who previously co-founded dating platform Tinder.
After leaving Tinder, Wolfe Herd founded Bumble, a dating app where only women can make the first move. In a letter to investors, Wolfe Herd said that women making the first move is a significant move. Bumble’s board also comprises 73% women, and the company is set to create a gender balance in the dating world and entrepreneurial field.
At age 31, she has since become the youngest female CEO to take a company public in the United States.
“Archaic gender dynamics and old-fashioned traditions still ruled the dating world,” Wolfe Herd said. “This led to all sorts of unhealthy dynamics that ultimately disempowered women and created unnecessary pressure for men.”
Women account for only 7.4% of Fortune 500 CEOs – may be the highest in history but still significantly low. According to Nasdaq estimates, only about 20 of current U.S. public companies were led through IPO by a female founder.
“Women seem to be the focus of lots of additional mentoring, which only suggests that there is something lacking in women,” said Tanya Rolfe, managing partner at Her Capital, a female-led venture capital firm focused on female founders in Southeast Asia. “What women founders need is simple, and it is equal access to financial investment.”
There is clearly a gender problem in the system. However, the problem is not the unavailability of women entrepreneurs but adequate support and access to funding. According to a 2018 Boston Consulting Group study, there was a “clear gender gap in new business funding.” Investments in businesses founded or co-founded by women averaged $935,000 compared to the $2.1 million average received by their male counterparts.
The recent COVID-19 pandemic has also contributed to widening that gap. It was reported in 2020 that global venture funding rose 13% from the previous year, however, investment in women-led companies fell 27%, as reported in a recent BCG study.
“Confluences of crises – demands for racial justice, #MeToo, Black Lives Matter, Covid-19, and an economic downturn – makes this a critical moment for corporation inclusion, equity and diversity,” said Matt Krentz, managing director and senior partner at BCG, and co-author of the study. “Of all these issues, Covid-19 may pose the largest threat to female founders.”
Following this discovery, female founders are beginning to speak up as they seek more funding support from the necessary organizations.
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