The allegedly confidential Bumble IPO has been filed.
Several news reports have revealed that the dating app is set to go public in February 2021, and they’re seeking a valuation in the billions.
While a rep for a company hasn’t commented on the matter — because, again, it’s confidential — there have been some hints that there’s more to this matter than meets the eye.
Let’s take a look at what we do, and don’t, know about this latest move.
Bumble IPO: Over-Inflating Their Valuation?
According to US News & World Report, the Bumble IPO is historic in its own right — that is, of course, if it truly comes to fruition in February 2021. As of this writing, Match (NYSE: MTCH) is the only dating app that is currently being publicly traded, so Bumble would only be the second dating app in history to hit the stock market.
However, it’s worth noting that Bumble has several “sister” apps but no separate companies.
Match, on the other hand, owns Tinder, Match, Hinge, and Plenty of Fish, as well as several online matchmaking services. That’s a completely different business model which, arguably, makes it more valuable than the Bumble IPO. Indeed, Match’s valuation is $18 billion, with $10 billion alone in valuation for Tinder.
So what’s really going on here?
Another WeWork Situation?
The high valuation that the Bumble IPO is seeking is causing some people to remember a very similar situation: the WeWork disaster.
WeWork, which wanted to go public in 2020, had an initial valuation of $47 billion, only to cut the initial valuation in half shortly after its IPO in August. According to Warrior Trading, the company then withdrew its IPO on September 30th, delaying it indefinitely.
Is the same thing happening here? The Motley Fool has questions, to be sure.
“Earlier this year, Bumble reportedly topped 100 million users. The app’s sibling, Badoo, is the world’s largest dating app, and together the pair boasts 600 million users worldwide.
Bumble generated revenue of $240 million in 2019, according to reports, and has exceeded internal growth estimates in each of the past two years,” they write, adding that Match previously offered to buy the company for nearly a billion dollars (an offer which was subsequently refused).
The fact that Match’s offer to buy the app for such a high price certainly raises questions about whether this alleged “unicorn company” is really worth the valuation it’s claiming, which of course calls the Bumble IPO into question.
There is certainly no shortage of alternative investment opportunities, so one should really be careful before throwing all their eggs in the proverbial basket of the stock market — especially with such a potentially volatile stock.