Bumble, the dating app that enables women to make the first move, topped US$13 billion on Friday, 12 February. It offered 50 million shares at US$43 each, letting it raise more than US$2bn. Listed on the NASDAQ as \”BMBL\”, its shares increased by 63.5% to US$70.55 on its first trading session, valuing the organization at over US$7.7 billion. By 25 February 2021, its stock price is at US$63.98 giving it an industry capitalisation of US$7.38 billion.
Wait – before you begin to get excited about hitting that buy button on \”BMBL\” or think of business opportunities in the online dating scene – its smart to consider: How did Bumble become so big?
Bumble's Business Model: A Chip Off The Old Block
Bumble has a \”freemium model,\” which means users can join and match for free. It earns the bulk of its revenue from in-app purchases and different subscription offerings like Bumble Boost, which starts at US$12.99 per week, and its upgraded Bumble Premium, which starts at US$17.99 per week.
The paid offerings let users do things like make their profile more prominent, see who liked their profile first or engage more users around the platform on a daily basis. These paid offerings are how Bumble makes money, beyond just advertising and partnerships.
Similar to the rivals Tinder and Hinge, which operate on a freemium business model, using the app for free may be good for a bit of fun, but to actually enjoy the perks of the app (matches, swipes), you will likely be persuaded to part with cash.
According to Forbes, More than 10% of Bumble’s users pay US$9.99 for any monthly subscription to access perks like extra time to decide whether a suitor merits a note. At competitor Tinder, just about 5% of users pay for a similar service.
The company said hello had 12.3 million monthly active users (MAU) according to their S1 filing as of 30 Sept 2021. Bumble CEO Whitney Wolfe has also said that the company is focusing its efforts on converting much more of its user base to those paid customers by reinvesting later on monetisation features and product offerings.
Taking a closer look at their financial statements, it can be seen that Bumble Inc had a revenue (adjusted before reorganisation and IPO) of $412m between 29 January and 30 September 2021. Their operating costs and expenses totaled $419m, leaving all of them with a net operating loss (inc. taxes) of -$55m, but improving from their 2021 net loss of -$108m. Hence, we can see that Bumble is not quite profitable yet, even from an EBITA perspective.
Part from the reason why Wolfe wants to take the company public can also be to raise more funds to be able to scale even faster; what this means is global expansion, hiring talent and rolling out more features that are in line with its long-term strategy. If you take the company public, the core team and early-stage investors can then offload some of that operational risk towards the public.
What Differentiates Bumble From Its Competitors?
The core value proposition of Bumble is the fact that women make the first move on the app. In a heterosexual match, the man cannot initiate a conversation having a woman until she helps make the first move. The match will last 24 hours before disappearing if the woman does not respond, 'like Cinderella, the pumpkin and the carriage', according to founder and CEO Whitney Wolfe.
This was one of the differentiating features that made an impression on an initial audience of women who were tired of being harassed with lewd messages or (unwarranted) obscene photos by American men.
Bumble offers several special features that can enhance your experience on the app, including SuperSwipe and Spotlight. 'SuperSwiping' on someone's profile allows them to know that you're particularly interested in them.
The 'Spotlight' feature allows you to put your profile at the top of the stack of profiles, so more and more people will view it that instant.
Users also provide the option to extend a match by Twenty four hours, on top of the default 24 hours. This selection signifies that you're especially interested in the other person. Non-Bumble Boost members can only buy this selection once per day, and no users can extend exactly the same match more than once.
Bumble Coins may be used to purchase any of these features, either for one or multiple uses. Alternatively, you will gain access to these features through a Bumble Boost subscription.
A Foray Into Non-Dating Interactions: A united states Social Experiment?
Having seemingly conquered the singles dating world overnight with brand messaging of female empowerment and also the COVID-19 pandemic accelerating the rise of internet dating, Bumble is also making plays into non-dating social as well as business interactions. While this may work with an American audience, time will inform if its long-term strategy works far away as well.
#1 Bumble Date
Bumble Date is the primary element of Bumble: its dating platform. This is when users match with potential romantic partners hoping of going on a date, where women make the first move.
#2 Bumble BFF
Bumble BFF is Bumble's platform for locating and matching with other users in their area to become friends with. This mode was created for people who are new in the region or are simply finding difficulty meeting new people and making new friends. In Bumble BFF, there are no rules about who approaches who first.
#3 Bumble Bizz
Finally, the Bumble Bizz component of the app allows people to network for business purposes, such as finding mentors within their field, chatting with potential interns, and kickstarting new career opportunities.
Keeping (Unwanted) Male Advances From the Inner Sanctum Of Sexual Selection
Humans, unlike chimpanzees, have evolved through the years based on female sexual selection. Which means that women generally make the ask whom to choose as a sexual partner. With financial independence offered to women today, the (online) dating scene may look skewed in the future, with an over-abundance of men joining dating apps simply to be rejected or excluded in the dating pool unless they create in-app purchases.
According to Statista, the distribution of Tinder users (ratio of male to female) is heavily skewed towards male users, with over 72% of users on Tinder in america being men versus 28% of women. Not only that, but there is also a massive perceived improvement in motivations in using the app, with a disproportionate amount of men inside a recent study seeking sex compared to women, who look more for relationships on dating apps.
This means that Bumble's business model may help women select men whom they deem are appropriate or desirable. However, this might also mean that men who already are attention-starved on these platforms could find it increasingly difficult to get any \”air time\” whatsoever without actually paying for \”premium\” features. This Darwinian approach could raise the quality of matches and top-line revenue for that company.
As a business, online dating is really a growth area that knows no bounds. It's recession-proof and appeals to people around the world from all walks of life and age groups. It can also be highly lucrative. Bumble has carved out a secure space for women in the dating scene for any gentler and more respectful way to date, which may be lacking in other competitors. In terms of downloading and using the app- that's left for that user to decide whether you need to be part of the paywall.