Bumble to go private in $1.3 billion deal with Ithaca Holdings

MUMBAI: Bumble is set to go private in a $1.3 billion buyout by newly formed Ithaca Holdings, marking a dramatic reversal for the dating app that was valued at $14 billion when it went public in 2021, Bloomberg reported.

Ithaca will pay $6.05 per share, according to a statement released on Tuesday. The offer represents a 138 per cent premium to Bumble’s closing share price on Friday, the last trading day before reports of a potential deal emerged. Bloomberg had reported on Monday that the two companies were in advanced talks over a sale.

Bumble shares surged as much as 57 per cent to $5.98 in New York on Tuesday, following a 50 per cent jump in the previous session, marking the stock’s biggest single-day gain since its February 2021 public listing.

The acquisition comes as Bumble and other dating platforms face growing fatigue among younger users, putting pressure on companies to rethink how people connect online.

Founded in 2014 by former Tinder co-founder Whitney Wolfe Herd, Bumble built its identity around a women-first approach that required women to make the first move in heterosexual matches. However, declining user engagement has pushed the company to revisit its original proposition.

In August, Bumble dropped its women-first model in its latest effort to attract and retain users. The company has also introduced an artificial intelligence-powered assistant designed to act as a personal matchmaker, offering an alternative to swiping through profiles.

The proposed buyout marks a significant shift for a business that was valued at around $14 billion when it went public more than five and a half years ago. Going private will give the company a new ownership structure as it seeks to revive engagement and adapt to changing dating habits.

Following the deal’s completion, Ithaca Holdings co-CEOs Ravi Gupta and John Hegeman will become co-CEOs of Bumble. Wolfe Herd will remain actively involved with the company, according to the statement.

Bumble will continue to be based in Austin, Texas, with major offices in London and New York.

Gupta, a partner at Sequoia Capital, and Hegeman, a former chief revenue officer at Meta Platforms, founded Ithaca Holdings earlier this year. Bloomberg reported in March that the firm planned to acquire at least one public or private company and infuse it with new technology, potentially including artificial intelligence.

The Bumble acquisition would give Ithaca an established consumer technology business as it pursues that strategy. For Bumble, the challenge will be to turn its technology push and product changes into renewed user interest in a market where dating app fatigue has become a growing concern.