40% of US couples today meet online. On Bumble, 150M messages were sent *every* day in 2020.
Still, Bumble’s mission is to be more than just another dating app - it has created a movement against antiquated dating norms (i.e. the man needing to reach out first) and online harassment. On the app, women have 24 hours to make the first move with matches.
Six years after leaving Tinder after experiencing sexual harassment & starting Bumble, CEO Whitney Herd is now a billionaire with Bumble’s IPO.
There is lots to ‘bee’ excited about.
Unit economics & growth are strong for Bumble, attesting to its strengths:
Brand: It has 42M monthly users across 150+ countries. 80% of new users come from word-of-mouth, attesting to the virality of its brand and UX.
Market growth: The online dating market grows 11% annually. Tailwinds include people marrying later, changing cultural norms, and increased mobile phone usage.
Freemium opportunity: The average paying user spends $27 annually on the app. With more users spending more, Bumble’s annual revenue increased 36% y-o-y while margins improved.
Features & UX: Bumble delivers superior products for a differentiated user experience. For instance, it was among the 1st to blur unsolicited lewd images and automate photo verifications.
Tangential products: “Be the CEO your parents always wanted you to marry” is an example of its cheeky ad copy. Because of its strong brand, Bumble has been able to launch products like Bumble Biz (networking) and Bumble BFF (friendships).
Match Group, the elephant in the room.
It’s true that the online dating space isn’t a winner takes all market - the average person is on 2 platforms. Still, Match owns Tinder, Hinge, OkCupid, and virtually every other big online dating site in the US besides Bumble.
Tinder alone has 54% of the global market share with $1.4B in revenue. Match itself just beat expectations with its Q4 earnings. It currently stands at a $46B valuation @ $142 / share.
To compete, Bumble will need to invest a lot of cash to keep building out innovative features and its brand. And competition is not friendly.
Talk cash to me.
Even without the likely IPO pop, here’s who cashing in -
Whitney Herd: the 31-year-old founder has a ~19% stake
Blackstone: original cofounder Andrey Andreev sold his stake amidst controversy. The financial titan is now the majority owner
Other investors: celebrities like Priyanka Chopra and Serena Williams
Let’s see if the market continues to be a-’buzz’ with the company. After all, a company can be a strong performer AND overpriced at the same time.
*For more thoughts, follow me @ https://twitter.com/shelleyyolivia