Blackstone-backed dating app Bumble had its highly anticipated initial public offering (IPO) on February 11th, 2021, and the results have been astonishing. According to CNBC, the IPO raised 2.2 billion dollars, and the company is now valued at 3 billion dollars. It’s a remarkable feat, and it’s fascinating to examine why this tech firm outperformed the stock market.
In this article, we’ll look at how Blackstone was able to back Bumble and what this could mean for the future of tech investments.
Blackstone-backed dating app Bumble raises $2.2 billion in U.S. IPO
Blackstone, a prominent private equity giant, has achieved significant returns on its investment in Bumble, the dating app that has become an online sensation over the last decade. Blackstone’s $100 million initial investment into the popular app before its IPO was estimated to be worth $3 billion following the completion of its highly successful listing on NASDAQ in February 2021.
Launched in 2014 by Whitney Wolfe Herd, Bumble is a location-based social and dating application popularly known for its “swipe left/right” feature. The app had over 15 million monthly regulars when Blackstone acquired interest in 2019. With the creation of “VIBee”, a platform used to identify a user’s reliability based on their responses and behaviour within the app, Bumble positioned itself as one of the leaders among larger competitors such as Match Group Inc., Tinder and Hinge. This quickly propelled it to greater heights leading up to its recent IPO.
Backstoe’s investment has proven to be one of their most profitable investments as they successfully captured an exit valuation 8X higher than their buy-in price in only two years. In addition, by surging past what analysts expected before its listing, Bumble successfully positioned itself as one of few unicorns with sustainable long term value potential from investors. As such, Blackstone has emerged again as a major success story for savvy investors looking for lucrative investments in fast-growing technology companies.
Investment Details
Blackstone’s investment in Bumble has recently been valued at $3 billion, up from its estimated $2.2 billion valuation.
Bumble, the dating app backed by Blackstone, became the latest success story in the U.S. IPO market after raising $2.2 billion in its public debut. The IPO priced at the top of its range, giving the dating app a market value of about $8.2 billion.
It’s a big success for Blackstone, who saw its investment surpass their expectations. Let’s take a look at the details of this investment.
Amount of Investment
Blackstone Group Inc. became one of the largest stakeholders in Bumble after investing $325 million in August 2019. When Bumble went public the following year, Blackstone held a roughly 20% stake, making it the fourth-largest shareholder. Since its IPO, Bumble’s share price has more than tripled, boosting Blackstone’s ownership stake to over $3 billion as of June 2021.
The investment from Blackstone was part of a broader funding round during which Bumble raised $2.2 billion ahead of its IPO on February 11th, 2021 at the NYSE (New York Stock Exchange). With this infusion of capital, Bumble had become one of the world’s most valuable publicly traded dating apps, valued at more than $8 billion.
Return on Investment
Blackstone, a leading U.S. private equity firm, had invested $86.9 million in Bumble in August 1, 2020 through its Blackstone Growth Funds Joint venture to acquire the shares of a group of investors who initially put money into the dating app. Through its investments, Blackstone has seen an incredible return on investment due to the recent success of Bumble’s United States Initial Public Offering (IPO).
Bumble recently raised $2.2 billion at an initial public offering (IPO) at a valuation of $8 billion and a 33% premium to its last private fund raising round as investors embraced what has become one of the biggest IPOs from a technology company this year. Bumble priced 66 million shares at $43 each, solidifying that it is being viewed as one of the most attractive public offerings this year with huge potential for lots of traction and growth over time.
Blackstone now holds around 13% shareholding in Bumble valued between $2 billion and $3 billion – an extremely high return on investment given their initial investment back in August 2020 valued at only around 86 million dollars! This demonstrates how profitable investing can be if done wisely and with sensible risk taking!
Bumble’s IPO
When dating app Bumble went public in February 2021, Blackstone funds had already invested 1.7 billion. Thanks to the successful IPO, Blackstone’s investment is now worth 3 billion dollars. This is a great example of how a Blackstone backed company can be successful in the public space.
Let’s look at the details of Bumble’s IPO.
Overview of Bumble’s IPO
On February 11th, Blackstone-backed dating app Bumble Inc. raised $2.2 billion in its initial public offering (IPO), making it the biggest U.S.-listed IPO from a consumer technology firm this year. The company went public at $43 per share and has since increased to around $76, valuing Blackstone’s investment at about $3 billion.
Bumble sold 50 million shares for the IPO, priced above the expected range of between $28 and $30 per share. The company trades on NASDAQ under the ticker symbol “BMBL” and is headed by CEO Whitney Wolfe Herd, who owns 24% of Bumble’s shares and takes home a hefty $112 million from the IPO itself.
Before this offering, investor Blackstone had owned a majority stake in Bumble since 2019 when it purchased it from MagicLab Inc. in an all-cash transaction worth nearly $3 billion dollars, including assumed debt and return of capital to shareholders related to the transaction. Following today’s public offering, it is estimated that Blackstone will hold around 43% stake in Bumble with MagicLab retaining 33%. In addition, private equity giant Sequoia Capital holds a sizable ownership stake in Bumble with an estimated 5%.
Impact of the IPO on Blackstone’s Investment
The successful initial public offering (IPO) of Bumble Inc. on February 11, 2021 has made Blackstone Group Inc., one of the major shareholders at the time of the IPO, a substantial gainer in terms of their investment in the dating app. According to a document filed by Bumble with the U.S. Securities and Exchange Commission, Blackstone initially invested $440 million for a 19% stake in the app before its trading debut on public exchanges as U.S.-listed shares using the ticker symbol ‘BMBL’. The company has since soared to a maximum market capitalization close to $8 billion at press time, meaning an appreciation in value of Blackstone’s holding nearly sixfold since its initial investment back in March 2020.
Although specific details have not yet been disclosed by either party, Blackstone and its co-investors have likely participated in subsequent funding rounds over time with their stake size likely increasing accordingly and thus further enhancing their holdings’ gains in value by way of leveraged financing or stock purchase agreements etc.. However, these details remain unknown until stated otherwise by Bumble or Blackstone group representatives.
Considering such tremendous appreciation within less than 12 months following their initial investment, this undoubtedly stands as an impressive portfolio addition for Blackstone providing insights into what could be expected from their strategy revolving around tech startups going forward and driving future returns across different geographies where similar investments may be made with cap-rate thought leadership expected from their global partners networked around them .
Market Analysis
Blackstone’s investment into the dating app Bumble has proved very successful, now valued at $3 billion following Bumble’s US IPO. This marks an impressive return on investment for Blackstone, which successfully backed the company before going public.
In this section, we will look closer at the company’s market analysis and how it affects Blackstone’s portfolio.
Overview of the Dating App Market
The dating app market has seen remarkable growth in recent years. This is due to the emergence of social networks and mobile technologies, and a shift in how people view relationships and dating. In addition, the rise of dating apps has disrupted traditional ways of meeting, with many focusing on connecting people faster, with more safety and efficiency. In examining the market, it is important to consider key factors such as user demographics, types of apps available, revenue models used by these apps, and regulations governing their use across countries.
User demographic breakdowns vary widely across regions, with most users falling between 18-44 years old. Generally speaking users make up roughly equal percentages between male (48%) and female (50-55%), with a small percentage belonging to non-binary genders or preferring not to indicate (2%). Regarding ethnicity breakdowns, most major markets are largely made up of White/Caucasian groups representing around 75% or higher percent of total users. For example in North America overall it is estimated at 77%. However, a noticeable variation exists in Latin America where ethnic minority populations represent up to 45% or higher of total users – primarily reflecting the much larger proportionate population present there.
The largest category making up around 85%+ of the current dating app industry includes those focused primarily on matchmaking services through an algorithm-based matching process or manual vetting processes. Other popular apps are used for more casual connections leading typically towards short term engagements like hookup culture which make up another 10%. Remainder cater towards specific groups based on particular interests e.g (BTQ+, religious niche apps etc.) Lastly a very small but growing segment is impacting those looking for long term meaningful relationships from which Blackstone-backed Bumble falls into this section – although its monetization model us moving increasingly towards revenues generated by other areas within its portfolio such as Bumble’s foray into business networking services etc as noted recently when they raised $2.2 billion IPO in U.S markets recently valued at $3 billion now – large part being driven by Blackstone Group’s strong backing!
Impact of the IPO on the Dating App Market
Blackstone’s decision to invest in the dating app Bumble before its highly successful U.S. initial public offering (IPO) has made it one of the world’s largest stand-alone dating apps. The IPO has greatly impacted the entire dating application market by setting a new precedent for how technology companies are valued and financed.
The IPO signalled a major increase in investor confidence in the future potential of the internet–based, mobile-friendly lifestyle app market, which has grown more than 11 percent annually over the past four years. It also normalised high valuation multiples for privately held mobile apps such as Bumble, paving the way for other private internet companies to pursue IPOs with higher expectations of financial success.
The successful float of Bumble also pushed other businesses within its respective industry to contemplate their own IPOs or similar investment transactions to expand revenue streams or fund future growth initiatives. This trend could create upbeat sentiment among investors and trigger a larger wave of technology stocks being listed on American exchanges over time.
The success of Blackstone–backed Bumble plays an important role in demonstrating that different forms of venture capital can have a long–term impact on both start–ups and mid cap firms alike, as well as shift current trends when it comes to tech sector investments at large. This will likely come as positive news to other venture capitalists who may turn towards similar investment opportunities to replicate Blackstone’s impressive return on investment from securing shares of Bumble before its U.S. public debut.
Conclusion
Blackstone’s investment in Bumble is now worth $3 billion after the dating app raised $2.2 billion in its US Initial Public Offering.
With this, it is safe to say that Blackstone’s investment has paid off and has been a success story. In this conclusion, we will look at the factors that contributed to the success of the investment.
Summary of Blackstone’s Investment in Bumble
Blackstone Group Inc’s investment in the dating application Bumble Inc has seen a remarkable return, with its recent listing on the Nasdaq raising $2.2 billion in its U.S. initial public offering (IPO). Blackstone reportedly invested around $330 million in Bumble in 2016 and has since reaped a return of roughly 600%. As of December 2020, Blackstone’s Bumble stake was worth nearly $3 billion, making it one of a private equity firm’s most successful investments ever.
Originally founded by Whitney Wolfe Herd and Andrey Andreev as a rival to Tinder’s existing dating app, Bumble has since expanded into other areas such as social networking and business networking. It now counts 38 million registered users, 28 million subscribers and holds a category-leading market share of 37%. The company’s IPO comes after several years of impressive growth due to sustained mobile adoption and an increasingly affluent user base possible due to various pandemic-led initiatives.
Blackstone is one of many firms that have benefited from their investments in high-growth technology companies such as Bumble. As an early investor with impeccable timing, Blackstone has achieved incredible returns – far higher than traditional investments like stocks and bonds – proving the opportunities available through well-timed venture capital investment.
Tech expert fresh from the Australian Coast. Been in the tech industry more than 9 years, as part of a Business Growth Group. His out of office days are 100% for freestyle surfing and waves chasing.
