Following its IPO, Bumble shares surged 64% in the company’s trading debut Thursday, WSJ reports.
Numbers To Consider:
- Per Share Closing Price: $70.31
- Valuation (at that price): $13 Billion
- Initial Pricing Per Share: $43
- Initial Capital Raise: $2.2 Billion
Why It Matters: Bumble’s success is a reflection of two things — interest in matchmaking apps and new, buzzy public offerings (especially in tech).
The Backstory: Whitney Wolfe Herd founded Bumble in 2014 in an effort to flip the script on the traditional dating dynamic. Bumble is a platform where female users are required to make the first move, as well as an option for same-sex dating and interactions.
- Wolfe Herd was one of the co-founders of Tinder.
- With the IPO, Forbes reported Wolfe Herd, 31, became the world’s self-made woman billionaire.
The Plan: Bumble said it plans to use most of the proceeds to pay down debt and buy back shares from its Pre-IPO stakeholders. One of its backers, Blackstone, bought a majority stake in the firm back in 2019.
“Bumble makes money through in-app purchases offering premium features that aren’t available on the free version, such as the ability for a user to change their location to another city before a trip and additional control over who can see their profile.”
- The company posted a loss of $118.5 million for the first nine months of 2020.
- In the year-before period, it turned a profit of $54 million.
- In the first nine months of 2020, Bumble recorded $416.6 million in revenue, a rise from $362.2 million from the comparable year-ago period.
The IPO Market Continues To Rage On: Bumble joins other high-profile debuts Airbnb and DoorDash as recent successes to hit the public market. Coupled with an “avalanche of new special-purpose acquisition companies, with dozens of the so-called blank-check vehicles looking for targets to merge with,” the path to public ownership continues to heat up and push valuations upward.
At $80 per share, Bumble ($BMBL) trades at a $14.9 billion market capitalization and a $15.3 billion enterprise value.
If you assume they return to pre-pandemic growth of 36% in 2021 and maintain their 73% Gross Profit margins, then the company is trading for 28x forward Gross Profit. If you assume they improve EBITDA margins to 30%, they’re trading at 68x forward EBITDA.
This is quite a rich valuation for a company growing at 15% currently without clear network-effect driven dominance. But then again, $ABNB and $DASH are trading at even higher valuations…