Bumble has swiped right on a $1.3 billion deal to go private with Ithaca Holdings. The deal is finalised after years of struggle to revive growth in the market.
On Tuesday, shares soared 56% to $5.95 in early trading after surging 50% on Monday on the Ithaca deal. Bumble and its major competitor, Match Group (owner of Tinder and Hinge), have faced falling user engagement as younger demographics grow tired of swiping and seek more organic ways to connect.
“With Hinge having gained and continuing to gain share of more intentioned daters, Bumble’s niche has eroded. The management, brand, and strategy changes have also not helped,” Chandler Willison, TMT Research Analyst at M Science, said.
Bumble said Ithaca’s co-founders, Ravi Gupta and John Hegeman, will be co-CEOs after the takeover. The firm has offered $6.05 per share, a 122.4% premium to the stock’s June 24 closing price.
Whitney Wolfe Herd founded Bumble in 2014. It mainly focused on a “women-first” approach, and it has been a defining feature since, but it has been rolled back this year to improve user retention.
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During the second quarter, Bumble experienced a 16.4% drop in active subscribers down to 3.2 million, continuing a nearly two-year downward trend in quarterly revenue. Consequently, the company’s market capitalisation plummeted to approximately $582 million by Monday’s market close—a steep drop from its initial $14 billion valuation at its 2021 IPO.
