Bumble is off the market

For all the swiping your single friends are doing, the dating app business isn’t getting much love.

Bumble will be acquired by investment firm Ithaca Holdings in a $1.3 billion deal that will take the company private.

It’s a much-needed match for Bumble, whose five-year stint on Wall Street has been anything but romantic. Once valued at roughly $14 billion near its 2021 IPO, the company was worth just $335 million at Friday’s close. That said, Ithaca’s $6.05-per-share buyout offer represents a 138% premium to that price, shooting shares up 56.58% today.

The honeymoon is over

It’s not hard to see why the spark has faded. Between endless swiping, first dates that feel like job interviews, and three-month situationships that end in mutual ghosting, dating-app fatigue has become a familiar frustration. Younger singles are increasingly seeking more organic connections, posing a particular challenge for platforms whose business depends on keeping users engaged and paying for subscriptions. After all, a dating app’s ideal success story is also a customer who no longer needs it.

Bumble’s paying users fell 16.4% year-over-year to 3.2 million last quarter, while revenue dropped 15% to $211 million. Tinder also saw paying users decline 5%, as the industry struggles to convince singles that another premium subscription will improve their prospects.

But not everyone is getting ghosted: Hinge, whose “designed to be deleted” tagline promises meaningful connections, grew revenue by 22% and paid users by 17% last quarter. Its success suggests that people haven’t necessarily given up on online dating. They’re just becoming more selective about which platforms are worth their time and money.

Wall Street plays Cupid

It’s now up to Bumble’s new leaders, former Sequoia Capital partner Ravi Gupta and ex-Meta executive John Hegeman, to see if Silicon Valley can revive modern romance. The co-CEOs will become the first men to lead the dating app that made its name on women making the first move.

Whether the change can cure dating-app fatigue remains to be seen, but going private has its perks: Without Wall Street scrutinizing every quarter, Bumble will have more room to experiment and pursue a longer-term turnaround. The company has already been exploring AI-powered matchmaking and ways to help users meet beyond the swipe.

For an industry desperate to win back users, Bumble’s makeover could be a sign of things to come. And with AI increasingly in the mix, don’t be surprised if your next match is a chatbot supposedly interested in your weekend plans.—SY