Bumble dating app on its way to being sold at a valuation of $1 billion

Bumble, the dating app, is in advanced talks to be sold to Ithaca Holdings at a valuation of approximately $1 billion. The company's stock surged 50% following the report. The deal reflects a premium of nearly 200% over the current market value. The decision comes amid slowing growth in the industry and a decline in the number of paying users.

Bumble, the dating app, is in advanced negotiations to become a private company and be sold to investment firm Ithaca Holdings in a deal that would value it at approximately $1 billion, according to a Reuters report citing a person familiar with the matter. Bumble's stock surged 50% on Monday following the report, closing at $3.80. As of Friday, the company's market cap stood at $389 million, meaning the deal price reflects a premium of nearly 200%. Ithaca Holdings is a holding company specializing in technology companies, founded by Ravi Gupta and John Hagman. The decision to explore a sale comes amid slowing growth in the dating app industry. Analyst Paolo Pescatore told Reuters, "Going private is seen less as a strategic move and more as an admission that Bumble's current strategy is failing." Bumble was founded in 2014 by Whitney Wolfe Herd and became known for its approach where women make the first move. The company went public on the Nasdaq in 2021, reaching a market cap of $14 billion, but has experienced a sustained decline over the past two years. Wolfe Herd stepped down as CEO in 2024 but returned to the role in March of the following year. Under her renewed leadership, Bumble launched AI-based features, but the number of paying users fell by more than 11% last year from 4.2 million to 3.7 million, and annual revenue dropped by about 10% to approximately $966 million. The downward trend continued in the second quarter ending in June, during which the number of paying users shrank by 16.4% to 3.2 million. Pescatore concluded, "AI won't be a silver bullet, and neither will another round of cuts. Bumble desperately needs to give consumers a particularly compelling reason to come back, and more importantly, to pay."