Blackstone Group-backed Bumble Inc’s shares have recently soared by more than 76% in its stock market debut, registering a valuation of $14 billion.
On the stock market index Nasdaq, the shares of the Texas-based social application opened at $76, which is well above its IPO (initial public offering) price of $43 per share. The company operates two major apps known as Badoo and Bumble, with nearly 40 million monthly active users across the globe. Bumble is planning to adopt the 2.2 billion proceeds from its IPO to pay off debts, pursue acquisitions, and fund international growth.
The dating app, which is well-known for its women-first approach, has been registering high revenue from premium subscriptions. In the 1st nine months of 2020, the company reportedly generated $376.6 million in revenue. Presently, it has over 1.1 million paying users, along with 1.3 million users on the Badoo app as well as other services.
Whitney Wolfe Herd, Chief Executive of Bumble, has reportedly cited that the company is presently focusing on leveraging the dating opportunity provided by the pandemic worldwide. It is aiming towards developing a preeminent platform to increasingly serve users for the long-term.
In 2019, Blackstone entered a $3 billion deal to obtain a majority stake in MagicLab, the company that owned the Badoo and Bumble apps, from its founder Andrey Andreev, following which, Wolfe Herd was named the CEO of Bumble. The app has reached the levels of DoorDash, Airbnb, and Snowflake, all of which had recorded strong 1st-day pops when they were launched in 2020.
Venture capital investors such as Benchmark's Bill Gurley have argued that various investment banks underprice their offerings to benefit investor clients in the 1st trades. Additionally, some investors also have pushed companies to go for direct listing, where the bankers will have a minor influence on the price of the stock. Citigroup and Goldman Sachs are the lead underwriters for the public offering.