💚 Bumble’s $6B IPO: What you need to know


February 8, 2021

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IPO
Bumble app

Bumble: An IPO to swipe right on?

Today, 40% of US couples meet online.

To contextualize how significant that is, in 2020, some 150m messages were sent through the dating app Bumble every day.

Now, those corny opening lines are about to make Whitney Wolfe Herd — Bumble’s founder (and former co-founder of Tinder) — a billionaire: The startup is prepping for a $6B IPO.

Bumble was founded in 2014…

… after Herd left Tinder due to sexual harassment.

She launched Bumble as an antidote to antiquated dating norms (e.g., the man needing to reach out first) and online harassment. On the app, women have 24 hours to make the first move with matches.

The approach has taken off

A review of the company’s pre-IPO S1 filing shows a number of strengths:

  • Brand: Bumble has 42m monthly users across 150+ countries, with 80% of new users coming from word-of-mouth.
  • Market growth: The online dating market grows 11% annually. Tailwinds include people marrying later, changing cultural norms, and increased mobile phone usage.
  • Freemium opportunity: Users are converting to premium products, with sales hitting $417m through the first 9 months of 2020, up 15% YoY.
  • Features & UX: Bumble was among the first dating apps to blur unsolicited lewd images and automate photo verifications.
  • Tangential products: Bumble has capitalized on its strong brand by launching Bumble Biz (networking) and Bumble BFF (friendships).

The online dating opportunity is big

But one of Bumble’s largest competitors, $42B+ Match Group, owns virtually every big dating app in the US, including Hinge, OkCupid, and Tinder (which has a 54% market share alone).

Match and Bumble have actually been embroiled in lawsuits in the past over trade secrets.

Whatever the app’s long-term fortunes, here are the big winners when the startup goes public (under $BMBL) later this week… just before Valentine’s Day:

  • Whitney Wolfe Herd: the 31-year-old founder has a 19% stake.
  • Blackstone: the PE giant bought a majority stake from the original cofounder Andrey Andreev at a $3B valuation (it’ll at least double its investment in less than 2 years).

Let’s see if the market is equally a-‘buzz’ with the company.

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Snippets
  • Oscar (the Obamacare health insurer) filed to go public. Co-founded by Josh Kushner (yep, Jared’s brother), the startup has 420k enrollees across 15 states. It had a $3.2B valuation in a 2018 funding round.
  • The 2nd most popular cryptocurrency (no, not Dogecoin) is Ethereum. The Chicago Mercantile Exchange (CME) just added Ether futures to its platform. When the CME added Bitcoin futures at the end of 2017, it “nearly perfectly coincided with the (then) epic top in that crypto,” per Seeking Alpha.
  • Short vids, big money: Kuaishou, a competitor to ByteDance (TikTok’s parent company), exploded on its IPO day and is worth $160B. We previously wrote that ByteDance could be worth $500B+ based on this comp.
  • Not The Onion: Researchers have put nanosensors in the roots of spinach leaves that can detect certain harmful explosives. When something is detected, the sensors send an alert email. That’s right: Spinach can send email now.
  • What an Easter egg: The dual-sense PlayStation 5 controllers have 40,000 tiny PlayStation symbols embedded in the control handles.
  • Niches make riches: BlackOakTV — a streaming service focused on Black content for $4.99/month — just went live. (More coverage on niche streaming services here.)
  • Apple FaceID now works if you wear a mask… but you have to own an Apple Watch (which authenticates) to unlock your phone.
  • A rundown of Superbowl Adsincluding Drake (State Farm), Tony Romo (Skechers) and Will Ferrell (GM).
Market Memes

Some legendary Litquidity memes (Source: Litquidity)

Meet Litquidity, Instagram’s most popular finance meme account

Epitomized by the rise and fall of GameStop, Reddit-fuelled meme stocks are having a serious moment.

At the height of the $GME madness, Litquidity — one of the most popular finance-related meme accounts (500k+ Instagram followers) — released the Exec Sum newsletter to help people make sense of the market madness.

The Hustle recently spoke with Litquidity to find out more:

Litquidity is run by an anonymous Wall Street banker

The Instagram account launched in March 2017 and quickly picked up a following among the finance crowd.

“My close friends know I run the account,” Litquidity tells us. “But my co-workers have no idea, and they’ll often send me my own memes.”

The memes really took off during quarantine

And, with the Litquidity brand blowing up, he saw there was a big appetite for market education and decided to launch the newsletter.

It already has sponsors and will serve as a stream of revenue to complement a (hilarious) merchandise and advertising business.

What’s after GameStop?

Litquidity thinks these 3 ticker have “meme stock” potential (obviously, not investment advice):

  • Virgin Galactic ($SPCE): “The ‘to the moon stuff’ meme works perfect with Virgin.”
  • Blackberry ($BB): “This is already a meme stock with the Reddit crowd, but there’s actually an interesting cybersecurity business supporting the story.”
  • DraftKings ($DKNG): “The whole sports betting industry is a meme factory in itself. There is also real momentum in the industry with so many states moving to legalize gambling to fill budget shortfalls exacerbated by COVID-19.”
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Q&A
Steven Sinofsky headshot

Steven Sinofsky spent 2+ decades at Microsoft. Now, he’s sharing his story on Substack.

Steven Sinofsky used to work at Microsoft.

And we mean work there: He joined in 1989 as a technical assistant to Bill Gates and spent more than 2 decades building Microsoft’s biggest products (Office, Windows).

Since leaving Microsoft in 2012, Sinofsky has worked at the VC firm Andreessen Horowitz and — for the first time — will spill the beans on his Microsoft years via a book serialized on Substack.

The Hustle spoke with Sinofsky to learn more about his project, Hardcore Software.

Why Substack?

Sinofsky tells us that Substack has advantages over traditional publishing, including an easier-to-consume cadence (“people like 5- to 8-minute snacks” rather than an hour sit-down), forum features (there’s a “very active community”), and opportunity for richer media (e.g., GIFs, social embeds).

What he wants to share from his Microsoft years

“A lot of the modern era of software is based on what Microsoft did in the 1990s,” says Sinofsky.

Key lessons include:

  • How to design graphical user interfaces (GUIs)
  • How to operate in 24-month-long cycles (in comparison, IBM’s cycles were 5+ years)
  • How to sell software products to billions of people

His first interaction with Bill Gates

Sinofsky received a recruiting call from the Microsoft founder while working toward his master’s degree. Gates didn’t beat around the bush: “You should come work at Microsoft. Do you have any questions?”

Writing the book has taught him how perceptions change

“There are so many things that you thought mattered and fought for over the course of your career that — when you write the story about it — you realize did not matter,” says Sinofsky.

(Read the full Q&A here.)

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Digital Camera market
Digital Camera v iPhone market

Say “total industry wipeout” on three. (Source: OM)

The iPhone has wiped out the digital camera market

Whenever people want to make fun of a stodgy old corporation that couldn’t see the future, they love referencing the camera maker Kodak.

But Kodak wasn’t the only old dog taken out by the digital camera revolution: All camera companies have now fallen to the iPhone.

Last year, only 9m cameras were sold, down from 122m in 2010, per tech journalist (and Gigamon founder) Om Malik.

Meanwhile, Apple moved 200m+ iPhones in 2020

While there are countless other camera-enabled smartphones, the iPhone — which has sold 1B+ units since launching in 2007 — clearly leads the pack.

Here’s how Malik thinks digital cameras will shake out moving forward:

  • Big players: At <10m units per year, the 4 big digital camera makers (Canon, Nikon, Fuji, Sony) will be fighting over scraps. Sony is best positioned to thrive, but not as a camera maker: It supplies camera sensors to everyone, including Apple.
  • Niche players: Super high-end cameras (Leica, Hasselblad, Phase One) will maintain share with pros and super-hobbyists.

As for Kodak, the company was last in the news for potential insider trading when the Trump administration awarded it $765m to make COVID-related pharmaceuticals.

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Meme of the day
Litquidity post

Source: @Litquidity / Instagram

Litquidity’s memes are so on point that we had to include this recent banger on the GameStop drama. For the uninitiated, the 4 people in the above meme (who all look strikingly similar) are:

  • Top left: Keith Gill (AKA Roaring Kitty, AKA main Redditor behind GameStop madness)
  • Top right: Cousin Greg from the HBO show Succession
  • Bottom left: WeWork’s co-founder and former CEO Adam Neumann
  • Bottom right: Robinhood’s co-founder and CEO Vlad Tenev
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