Bumble in Advanced Talks to Go Private in $1 Billion Ithaca Holdings Deal
Dating app Bumble is in advanced talks to be acquired by Ithaca Holdings in a deal valuing the firm at $1 billion. Shares surged 50% following the report amid slowing industry growth and declining paying users.
Dating app Bumble is in advanced talks to go private and be acquired by investment firm Ithaca Holdings in a deal valuing the company at approximately $1 billion, according to a Reuters report citing a person familiar with the matter.
Bumble shares surged 50% on Monday following the report, closing at $3.80. As of Friday, the company's market capitalization stood at $389 million, meaning the deal price reflects a premium of nearly 200%. Ithaca Holdings is a holding company specializing in technology firms, founded by Ravi Gupta and John Hegeman. According to the report, the decision to explore the sale of Bumble came against the backdrop of slowing growth in the dating app industry.
Challenges and Market Context
"The move to a private company is seen less as a strategic move and more as an admission that Bumble's current strategy is failing," analyst Paolo Pescatore told Reuters. "A change in ownership will not magically fix these underlying issues."
Bumble was founded in 2014 by Whitney Wolfe Herd and became famous for its approach where women make the first move in contacting potential partners. The company went public on Nasdaq in 2021 and reached a market cap of $14 billion, but has experienced a continuous decline over the past two years.
"AI will not be a silver bullet, nor will another round of cuts. Bumble desperately needs to give consumers a compelling reason to return, and more importantly, to pay," Pescatore concluded.
Financial Performance
Wolfe Herd stepped down as CEO in 2024, but returned to the role in March of the following year. She is expected to remain involved in managing the company. Under her renewed leadership, Bumble launched new features based on artificial intelligence (AI). However, the number of paying users dropped by more than 11% last year, from 4.2 million in 2024 to 3.7 million, while annual revenue fell by about 10% to approximately $966 million. The downward trend continued in the second quarter of the year, ending in June, during which the number of paying users shrank by 16.4% to 3.2 million.