Bumble, the popular and profitable dating and networking app built around the ethos of women calling the shots on how connections get made and developed, has made a deal for some independence of its own, and its founder, Whitney Wolfe Herd, is coming out of it as CEO of an even bigger dating empire.
Andrey Andreev, the founder of Badoo, the controversial London-based company that owns a series of dating apps and was the main backer and builder of Bumble, is selling his entire stake in MagicLab, the company that owned both Bumble and Badoo (and other dating apps), to Blackstone. He will step away from the business in the process, and Wolfe Herd, Bumble’s founder, becomes the CEO of the whole company, retaining much of her stake in the business in the process. We understand that stake is at about 19%.
The deal values Bumble and the wider business — which is profitable — at $3 billion.
Blackstone also will be making an investment in the company as part of the deal.
“This transaction is an incredibly important and exciting moment for Bumble and the MagicLab group of brands and team members. Blackstone is world-class at maximizing the success of entrepreneur-led companies, which presents a tremendous opportunity. We are very excited to build the next chapter with them,” said Wolfe Herd in a statement. “I am honored to take on the role of CEO of the group. I will strive to lead the group with a continued values-based and mission-first focus, the same one that has been core to Bumble since I founded the company five years ago. We will keep working towards our goal of recalibrating gender norms and empowering people to connect globally, and now at a much faster pace with our new partner.”
Bumble is consistently in the top 10 of lifestyle apps in the U.S., according to App Annie data. The WSJ reports that Bumble now has some 75 million users, although Apptopia’s figures are a little more conservative: it notes that aggregated, lifetime downloads of Bumble are about 52 million, while lifetime in-app purchase revenue is about $335 million. March 2019 was its best month ever for IAP revenue with $14.1 million, and over the past six months, Bumble has averaged 1.5 million downloads per month, Apptopia’s Adam Blacker told TechCrunch. (The download figure doesn’t include web-based signups.)
But while Bumble has been growing at a healthy clip — in addition to being profitable, MagicLab had revenue growth of 40% annually — the transaction caps off a tumultuous time at the corporate level for the company.
Almost exactly a year ago, Andrey Andreev had been talking about a future IPO for Badoo in the U.S., listing on Nasdaq. The bigger company at the time also included the eponymous Badoo app, which itself now has 450 million users, as well as a number of others targeting more specific communities (for example, older people), and it was altogether expecting to make some $400 million in revenues in 2018.
Within that bigger picture, Bumble was easily the high-profile jewel in the crown, especially in the high-visibility market of the U.S., where Badoo had hoped to list.
Badoo prior to that had reportedly turned down a $450 million offer for Bumble from Match (some have reported that Match might have offered as much as $1 billion or more for it) — a strange twist in a long saga between the two. (In brief: Match is the company that owns Tinder and had been locked a series of different lawsuits with Bumble: Wolfe Herd had previously been a Tinder co-founder and left under acrimonious circumstances. Andreev had previously met Wolfe Herd and then approached her to start Bumble under his wing in the wake of that departure.)
While a bold IPO was an interesting prospect, things took a turn for the worse this summer, when an expose in Forbes painted a bleak picture of misogyny and sleaze at the parent company, headed by an eccentric and oblique leader — not the image that Bumble wanted to project, and definitely not the image that would have read well on Wall Street.
“We’re excited to invest in MagicLab, which is a pioneer in the fast-growing online dating industry. They have a highly talented team and strong set of platforms, including Bumble, which was built on a commitment to inclusion and female empowerment,” said Jon Korngold, head of Blackstone Growth (BXG), in a statement. “This partnership is a perfect example of Blackstone’s ability to use its scale, long-term investment horizon, and deep bench of operational resources to help entrepreneurs take advantage of transformational growth opportunities in order to create global industry leaders over time.”
As with Wolfe Herd and Blackstone, Andreev does not address this aspect of the story in his statement on the sale, focusing instead on making a good return on his investment to fuel building more apps ahead.
“Blackstone presented MagicLab with a great opportunity to further develop the brands and platform, and I am confident Blackstone will take MagicLab to the next level in terms of growth and expansion. I am incredibly proud of the company, and of how we have connected millions of people around the world,” he said. “At MagicLab, I have had the pleasure of working with some of the best and most talented entrepreneurs. My aim now is to ensure a smooth and successful transition before I embark on a new business venture in search of innovative leaders with new and exciting ideas. I am grateful for all the support of my partners and employees over the years as we couldn’t have gotten to this point without them. I wish MagicLab and Blackstone every success.”
Wolfe Herd defended Badoo and Andreev through the bad press, but now with the divestment, it seems that there was more at play with a bid to extricate Bumble out of that relationship.