Wednesday, February 8, 2023

Bumble IPO filing details $ 125 million cash payment and founder’s loan

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Bumble founder Whitney Wolfe Herd received a payment of $ 125 million following a complex reorganization of the dating app’s parent company, according to a regulatory filing ahead of its initial public offering.

Details of Ms Wolfe Herd’s financial arrangements with the company, including a $ 119 million loan to an entity she controlled, are contained in an IPO prospectus released on Friday.

The prospectus also showed that Bumble Holdings, owner of Bumble and the Europe-centric dating app Badoo, suffered a loss and grew slower as a result of the reorganization led by the capital group. Blackstone investment in 2019.

Bumble has focused on the experience of women on its dating apps, tapping into the growing market of online matchmaking services. The company reported 42.1 million monthly active users on Badoo and its eponymous app at the end of September, of which around 2.4 million paid users.

But the company’s growth has slowed since Blackstone Okay to buy a controlling stake in 2019 and installed Ms Wolfe Herd as chief executive, following allegations of a toxic work environment under former manager Andrey Andreev.

Mr Andreev left the company, previously known as MagicLab, and sold his stake as part of the deal, Blackstone said at the time. The investment valued Bumble’s parent company at around $ 3 billion.

Ms Wolfe Herd received a cash payment of $ 125 million as a result of the Blackstone-led deal, according to the documents filed. Bumble also loaned $ 119 million to an entity controlled by Ms. Wolfe Herd. She paid off the rest of the loan this month.

Corporate governance experts generally caution against such transactions, which can raise questions about conflicts of interest. WeWork sparked backlash for similar related party transactions during its attempted public offering in 2019.

Blackstone, venture capital firm Accel and Ms Wolfe Herd are expected to retain voting control over Bumble after the IPO.

In a move that is common for private equity firms, Bumble will also be structured as a general partnership that provides tax benefits to insiders. The new shareholders will buy shares of a holding company, Bumble Inc, with a controlling stake in Bumble Holdings.

The IPO filing follows a strong market for new listings in the United States, after shares of other mainstream tech companies like Airbnb and DoorDash surged relative to their prices. Initial Public Offering.

The list will bolster the rivalry between Bumble and the dominant player in dating apps, Match Group, which owns Tinder, OKCupid and its namesake Match.com. The two companies were recently engaged in a legal battle over claims of patent infringement and theft of trade secrets, before settling all disputes last year.

Bumble is also facing increasing competition in the matchmaking industry as social media group Facebook rolls out its own dating service to its 2.7 billion users.

Bumble reported net losses of $ 117 million in the first nine months of last year, a positive profit reversal of $ 69 million over the same period in 2019, but a figure that the company said , was affected by transaction costs.

Growth slowed last year. In the first nine months of 2020, Bumble reported revenue of $ 417 million, an increase of 14.9% from the same period in 2019, but slower than the 35.8% growth in revenue that ‘she reported from 2018 to 2019.

Bumble presented the 2020 financial statements in two sections to reflect a change in the corporate structure following the completion of the Blackstone-led reorganization.

The company said it would use the proceeds of the IPO largely to pay off debt and buy back stakes from private shareholders. Goldman Sachs and Citigroup are the main underwriters of the offer.

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