Bumble, the online dating business, received a warm welcome from Wall Street, beginning trading well above its initial public offering price in a surge that valued the company at more than $14bn.
Shares debuted at $76 on the Nasdaq exchange on Thursday, 77 per cent higher than the price at which the company had sold shares to public investors the night before.
Bumble — whose properties include Badoo, which is popular among European match-seekers, as well as the eponymous app — raised $2.2bn from investors at $43 a share.
In a sign of the hot demand for emerging technology companies, it had increased the number of shares it sold and set the price above its expected range of $37 to $39 a share.
The listing marks a milestone for Bumble founder Whitney Wolfe Herd, who has battled competitors while championing a policy that requires women to “make the first move” on the app.
It could also heighten competition between Bumble and its dominant industry rival Match Group, which owns Tinder, OkCupid and Match.com and is already listed in the US.
“I think the global investment community can really get behind the potential of building a global women’s brand that has an impact on the way we connect and how we treat each other both on and offline,” Wolfe Herd said.
The offering marked a quick turnround for Bumble, which sold a majority stake to Blackstone in 2019 in a roughly $3bn deal. At the company’s opening price, it had a market capitalisation of $14.1bn, based on the total number of shares listed in its prospectus.
IPO filings disclosed that Wolfe Herd received $125m in proceeds as part of the Blackstone transaction, as well as a loan provided by the company, which was later settled as part of an apparent compensation scheme.
Wolfe Herd said she used the loan to pay personal taxes arising from the transaction, which would have otherwise forced her to liquidate her stake in Bumble, and described the share sales as “standard” for founders of companies at its scale.
The company said it planned to use proceeds from the offering largely to repurchase shares from pre-IPO owners and pay down debt. Bumble’s private owners will retain about 97 per cent of the company’s voting rights following the offering.
Competition has intensified among the biggest companies offering dating apps. On Tuesday Match announced that it was buying the South Korean video chat company Hyperconnect for $1.7bn, in a move that expands its portfolio in Asia.
Bumble has in the past accused Match of attempts to buy, clone and “intimidate” the company before both parties settled several tit-for-tat lawsuits last year over allegations of patent infringement and theft of trade secrets.
Separately, Bumble faces competition from Facebook, the world’s largest social media company, which started rolling out its own dating product in 2019.
Youssef Squali, head of internet and digital media research at Truist Securities, said that while Match had built up a strong portfolio of apps across a variety of “niches”, consumers tended to use multiple dating apps at once.
“The market is large enough to accommodate multiple success stories,” Squali said. “It’s not an ‘either-or’ situation.”
Bumble reported that it swung to a loss of $117m in the first nine months of last year on revenues of $417m as revenue growth slowed. The company said transaction costs factored into the losses.
Goldman Sachs and Citigroup served as lead underwriters on Bumble’s offering.