The company’s shares opened at $76 on the Nasdaq, well above its initial public offering (IPO) price of $43 per share. Austin, Texas-based Bumble operates two major apps, Bumble and Badoo, which touts over 40 million monthly active users worldwide.
In an interview on Thursday, Bumble chief executive Whitney Wolfe Herd said the global pandemic encouraged people to build a relationship and meet new people on their phones.
“People are building meaningful relationships digitally first, and then the physical follows. This is a really phenomenal shift toward safety and engineering more accountable experiences,” said Wolfe Herd, who expects the trend to continue in a post-COVID 19 world.
Bumble, unique among dating apps for its “women-first approach,” generates revenue mostly from premium subscriptions. The company reported $376.6 million in revenue in the first nine months of 2020, according to filings. The Bumble app had 1.1 million paying users, with 1.3 million on the Badoo app and other services.
Wolfe Herd, 31, has become one of the youngest female executives leading a public company. A co-founder of rival app Tinder, she later sued the company, alleging that her co-founders subjected her to sexual harassment. Tinder parent Match Group Inc, which denied the allegations, paid about $1 million to settle the dispute.
Bumble plans to use the $2.2 billion proceeds from the IPO to pay off debt, fund international growth, and pursue acquisitions.
“Right now we’re very focused on taking the dating opportunity globally,” said Wolfe Herd. “We also hope to have the preeminent platform for meeting whoever you’re looking for, for whatever use case, in the long run.”
In 2019, Blackstone paid about $3 billion to acquire a majority stake in MagicLab, which owned the Bumble and Badoo apps at the time, from founder Andrey Andreev. Wolfe Herd was named Bumble’s chief executive officer after the deal.
Bumble also joins the ranks of Snowflake Inc, Airbnb Inc and DoorDash Inc, all of which had strong first-day pops when they debuted last year.
Stellar first-day trading gains such as these are likely to fuel criticism from some venture capital investors, including Benchmark’s Bill Gurley, who has argued that investment banks underprice offerings so their investor clients can win big in first trades.
Some investors have also pushed companies to consider direct listing, where bankers have little influence on the price at which the stock is sold. Goldman Sachs and Citigroup are the lead underwriters for the offering. Reporting by Niket Nishant and Noor Zainab Hussain in Bengaluru; Editing by Anil D’Silva and Aurora Ellis