Dating app Bumble sold in $1.9 billion deal after value plummets

Bumble is being taken private by newly formed firm Ithaca Holdings for $US1.3 billion ($1.9 billion), a fraction of its value when it went public in 2021, after younger users began to sour on dating apps.

Ithaca Holdings will pay $US6.05 per share, according to a statement on Tuesday. Bloomberg reported earlier this week that the two firms were in advanced talks about a sale. The deal price represents a 138 per cent premium over Bumble’s closing share price on Friday, the last trading day before Bloomberg and other news outlets reported on a possible deal.

After the deal is completed, Ithaca Holdings’ two chief executive officers, Ravi Gupta and John Hegeman, will become co-CEOs of Bumble. Founder Whitney Wolfe Herd will “remain actively involved with Bumble,” she said in the statement. The dating company will remain based in Austin with other major offices in London and New York.

The deal marks a dramatic turn for Bumble, which was valued at $US14 billion when it went public more than five and a half years ago, making Wolfe Herd, a former Tinder cofounder, the youngest female self-made billionaire in the world at that time. She founded Bumble in 2014 at the age of 24, on the premise that only women could make the first move on the app. But Bumble, like many of its dating-app peers, has suffered user declines as young people have grown fatigued with online dating.

In August, Bumble ditched the women-go-first model, its latest move to boost user engagement. The company this year also introduced an artificial intelligence-powered assistant designed to act as a personal matchmaker, offering an alternative experience to swiping through user profiles.

Bumble shares surged as much as 57 per cent to $US5.98 in New York. The stock had already soared 50 per cent on Monday, marking its biggest single-day gain since the company went public in February 2021.

Ithaca Holdings was founded earlier this year by Gupta, a Sequoia Capital partner, and Hegeman, a former Meta chief revenue officer. Their plan at the time was to acquire at least one public or private firm and infuse it with new technology, potentially including AI, Bloomberg reported in March.