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Bumble planning IPO worth over $6B: RPT

According to reports, Bumble, a dating app designed to have women approach men first, is planning to go public at the beginning of 2021. Yahoo Finance’s The Final Round panel discusses what the companies IPO could look like and why the dating space is still profitable.

Video Transcript

MYLES UDLAND: All right, we've talked a lot in the last couple of weeks about all the IPOs set to come to market. Reports that another company is exploring a debut in this current environment, and that is Bumble, which is the dating app. The most notable part of its feature is that women have to initiate the conversation. And Dan Roberts, would you like to talk about the online dating space, or would you prefer to talk about what it means for the IPO market?

DAN ROBERTS: Well, I'm more interested, Myles, in this play as an IPO, because I'm sure we'll be tempted to add this to the kind of unicorn parade, but it's a little bit different from some of the others. I mean, over the last couple of months, we've talked about how we think we're going to get Airbnb, DoorDash, Palantir, Snowflake all before the end of 2020. None of those are profitable, and we know they're kind of rushing this out. They want to get this done.

According to reports, Bumble looking to go public in the beginning of 2021, and Bumble, Whitney Wolfe claimed a year ago, is profitable. Also a very clever app idea. I mean, of course she was previously at Tinder. We know there was an ugly lawsuit there. She left, started her own thing that in many ways some critics have said there's really only one key difference from Tinder. Well, but that difference, that feature, made all the difference. And, as you mentioned, that's ladies having to go first. So a lot of women see that as safer. They like Bumble better.

There's also been interesting kind of corporate intrigue with Bumble's history in terms of its ownership, because lost in the shuffle a little bit, and I was surprised some of the news stories here don't even mention this, but Bumble initially sold to the Russian-based online dating company that owned Badoo, B-A-D-O-O, which was a Russia dating app. Then there was a problematic story about Andrey Andreev, who was the owner of that parent company, which called itself [? MagicLab. ?] It owned Badoo, Bumble and some others.

He divested his stake, and that allowed Bumble to shed the baggage there, and sold the ownership stake to Blackstone. So that included Badoo and Bumble. So now we're talking about an IPO in which Blackstone would obviously do very well. That is the current majority owner in Bumble, and I think many people maybe didn't realize that when Blackstone took control that that still had the door open for an IPO. So I think it's going do well. We'll get to see the financials. Boy, I can't wait for that S1. Let's see if it really is profitable and how profitable, and I think it might stand apart from some of these other offerings.

So very interesting, and also, of course, there's the obvious one more thought here. In the pandemic, what has online dating been like? I don't know. Melody doesn't know. Myles, you don't know. But I'm interested, because, you know, people have different comfort levels of whether they can even go on a date right now, and I'm sure the different mobile, you know, fast swipe dating apps have all approached that differently.

MELODY HAHM: And Seana does not know either, right? But--

[LAUGHTER]

But if you think about-- actually, Dan, I have an answer to your question, because you're saying that we don't know, but we do have the numbers, right? Because Match Group is the perfect paradigm, right? The reason why investors would be excited about a Bumble is because Tinder is the best performing dating app out there. We know Facebook tried to encroach on this space. We haven't heard much about that endeavor, right?

But when you think about the potential for Bumble, which is number two, according to many measurements when it comes to actual number of users right now. It's holding steady at about 100 million. Early on in the pandemic, April, May, there was a drop off, right? And then now we have seen it return and even surpass pre-COVID levels in terms of time on the platform, in terms of the number of engagements, and even people choosing to do the FaceTime call.

People are being very inventive, because loneliness, as we know, is part of the pandemic, right? This is a very solitary sort of epidemic where people are being forced to stay at home or be encouraged not to talk to people. But I think ultimately, there is a lot of pent up sadness, especially when people who are used to having social lives are not able to access that right now.

So whether we can make judgments, right, about the safety of all of these interactions, but at the same time, I do think this is a model of dating and connection that just simply will not go away, and I do think this is one of those trends we keep talking about whether it will be sticky and accelerate. I think it will be both, so it makes a lot of sense to me that this company has waited, right, to try to figure out a new way to enter the public market on it's own.

MYLES UDLAND: Melody, I cannot wait for you to transition from the financial media side to the sell side analyst side, and I can read your note on pent up sadness. What a tremendous sort of phrase to discuss the business opportunity here for Bumble. And I agree, I think that the online dating space is really, I think like many things, after seeming like this was the end of the world, has probably accelerated in a way that all of these players, and you see Match shares up almost 3% today, all these players are more excited about than they thought they would ever be.

DAN ROBERTS: And, guys, just quickly, I'm remembering, actually, via a source that Bumble amid the pandemic added some kind of filter or labeling feature where you could say, you know, what are you comfortable with? Zoom date, distance date in person, mask date, you know, no masks. So I think they hopped on that train early of trying to cater to people's comfort level.

MYLES UDLAND: Yeah, and well, again, certainly that's one that we're going to be excited about. Now, reports, again, indicating that could come early next year, so we may be waiting a bit for any of that information from Bumble.