Dating app Bumble’s stock closed at $70.31 on Thursday, nearly 64 percent above its IPO price.
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Bumble raised around $2.15 billion through its IPO by selling 50 million shares of its stock for $43 apiece. It had initially set a price range of $28 to $30, before raising it to $37 to $39 earlier this week. The company’s stock opened at $76 on Thursday, about 77 percent above its IPO price.
The tech company has made a name for itself as a women-centric dating app — women have to send the first message after matching with another user. Since establishing itself as a dating app, it’s expanded to the areas of friendship with Bumble BFF and professional networking with Bumble Bizz.
The company reported having 42 million monthly active users during the third quarter of 2020 and about 2.4 million paying users as of September 2020. Bumble reported revenue of around $377 million between Jan. 29, 2020, and Sept. 30, 2020, with losses of $84.1 million during that period. Bumble has been profitable in the past, generating $68.6 million in profit during the first nine months of 2019, according to its S-1.
Bumble’s public debut comes at a time when tech IPOs have seen their stocks surge on the first day of trading and online services in general are doing well amid the COVID-19 pandemic. Bumble’s closest public market competitor, Match Group, has seen its stock price climb around 128 percent over the past 12 months, and closed at $172.13 on Thursday. Match Group is the parent company of dating apps Tinder and Hinge, along with other dating websites like OkCupid and PlentyOfFish.
“One would think these companies would face some headwind with people generally not able to go out on regular dates, but they’ve been able to capitalize I guess to some extent on people’s need to connect and either try to safely date or prepare for a time when that’s more possible,” Scott Kessler, global sector lead of TMT at Third Bridge Group, said in an interview with Crunchbase News. “So Match I think has done well because the company has been positioned and has executed well but they also have done a good job of acquiring a lot of different franchises and businesses.”
With more than $2 billion in new capital through the IPO, Bumble could pursue a similar strategy to Match in acquiring other dating brands, Kessler said.
“That’s a company I could see pursing maybe not the same strategy but maybe looking at acquisitions, whether it’s categories or geographies, where they don’t have a strong presence,” he said.
Illustration: Dom Guzman
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