Bumble, the online dating business, received a warm welcome from Wall Street on Wednesday, pricing shares in an initial public offering above their marketed range and valuing the company at more than $8bn.
Bumble — whose properties include Badoo, which is popular among European match-seekers, as well as the eponymous app — sold shares at $43 apiece, raising $2.2bn from investors.
In a sign of the hot demand for emerging tech companies, Bumble increased the number of shares it sold on Wednesday while also surpassing its expected price range of $37 to $39.
The listing will be a milestone for Bumble founder Whitney Wolfe Herd, who has battled competitors while championing a policy that requires women to “make the first move” on the app.
It could also heighten competition between Bumble and its dominant industry rival Match Group, which owns Tinder, OkCupid and Match.com and is already listed in the US.
The offering marked a quick turnround for Bumble, which sold a majority stake to Blackstone in 2019 in a roughly $3bn deal. At the IPO price, the company would have a market capitalisation of $8.2bn, based on the total number of shares outstanding.
IPO filings disclosed that Wolfe Herd received $125m in proceeds as part of the Blackstone transaction, as well as a loan provided by the company, which was later settled as part of an apparent compensation scheme.
The company said it planned to use proceeds from the offering largely to repurchase shares from pre-IPO owners and pay down debt. Bumble’s private owners will retain about 97 per cent of the company’s voting rights following the offering.
Competition has intensified among the biggest companies offering dating apps. On Tuesday, Match announced that it was buying South Korean video chat company Hyperconnect for $1.7bn, in a move that expands its portfolio in Asia.
Bumble has in the past accused Match of attempts to buy, clone and “intimidate” the company before both parties settled several tit-for-tat lawsuits last year over allegations of patent infringement and theft of trade secrets.
Separately, Bumble faces competition from Facebook, the world’s largest social media company, which started rolling out its own dating product in 2019.
Youssef Squali, head of internet and digital media research at Truist Securities, said that while Match had built up a strong portfolio of apps across a variety of “niches”, consumers tended to use multiple dating apps at once.
“The market is large enough to accommodate multiple success stories,” Squali said. “It’s not an ‘either-or’ situation.”
Bumble reported that it swung to a loss of $117m in the first nine months of last year on revenues of $417m as revenue growth slowed. The company said transaction costs factored into the losses.
Goldman Sachs and Citigroup served as lead underwriters on Bumble’s offering.