It could have been a story with a cinematic happy ending. Dating app Tinder co-founder Whitney Wolfe Herd left the company nearly a decade ago and filed a sexual harassment lawsuit against it. With an out-of-court settlement of one million dollars (almost 23 million crowns) in her pocket, she founded her own dating app Bumble, tailored for women. But two years after Bumble’s IPO, the stock price is 80 percent lower, and the Hollywood story of a successful businesswoman is beginning to wear thin.
Two years ago, the now thirty-four-year-old businesswoman filled the front pages of newspapers and was written about as the world’s youngest self-made billionaire. This year they are filling them as well, but before “Billionaire” journalists complete the word “former”. And not only that – a few days ago, Whitney Wolfe Herd announced that she was leaving the post of CEO of Bumble.
“Moving to the company’s board will allow me to move forward into a new and exciting role, return to my founding roots and focus with great passion on the next chapter of our growth.” she said Wolfe Herd’s diary New York Times. This is Bumble’s second departure from top positions this year, with company president Tariq Shaukat stepping down in August after three years in the job. It is part of a broader sobering up that has befallen the company.
Whitney Wolfe Herd founded Bumble in 2014 after leaving Match.com, where she helped develop the popular dating app Tinder. But Bumble is not just a copied idea in a new design, journalists nickname the service “Feminist Tinder”. It’s a matchmaking app by and for women who have complete control over who they text. So if a so-called match occurs, when both of the potential couple indicate that they like the other, the woman must write first (in the case of two women, both are equal). If the user does not do this within a certain time, the match will disappear. So men can’t bombard women with spam like they do on other dating apps.
In January 2021, Bumble entered the stock market, and the value of the entire company soared first to seven billion dollars, and later even to eleven billion (converted to 160 and 253 billion crowns, respectively). Actress and model Priyanka Chopra and tennis player Serena Williams also invested in the startup. And then Wolfe Herd became a follower Forbesu and according to Bloomberg the youngest self-made billionaire of the world.
But that is no longer the case, the current value of the company on the markets is two and a half billion dollars, which is about 57 billion crowns. The main reason is that nowadays people are frugal and are not willing to pay so much for matchmaking – so even for the premium version of Bumble. At least that’s according to the analysis of the dating business. Tinder also has problems, having lost 826,000 paying customers this year, and the share price of the Match.com group, under which it falls, fell by 16 percent in the third quarter.
After all, a large part of the technology and startup scene as such is also experiencing a big drop. Business prices skyrocketed during (and sometimes before) the covid pandemic, due in part to low interest rates and a glut of cheap money, but last year saw a cooling off. There is less money on the market and investors are watching more closely whether companies are profitable, whether they are growing efficiently and how viable their economic model is.
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What Bumble is going through is nothing that other businesses haven’t experienced. An example can be the Czech Twisto, which was sold for two billion crowns and now its value is a fraction. A number of stock titles, such as the American car manufacturer Rivian, the space travel company Virgin Galactic or the analytical company Palantir, which were popular during the covid pandemic, also fell.
All of this has taken its toll on Bumble, and the company is now hoping for a rescue from a new boss. Starting in January, Lidiane Jonesová, a native of Brazil, who has held senior management positions in the American software company Salesforce and the IT giant Microsoft, will take over the management of the company.
He comes to Bumble from the position of CEO of Slack Technologies, an American company that developed the communication tool of the same name and falls under Salesforce. Slack is an inherent part of the startup community. By the way, Slack itself was actually created by accident during the development of a computer game, when its developers communicated through it.
However, Whitney Wolfe Herd is not leaving Bumble completely, as she mentioned earlier, she will remain on the board. In addition to solving financial issues, Jones is also faced with the challenge of how to use artificial intelligence in online dating sites. The fact that Bumble has this planned and that it can significantly change the way of digital dating has already been repeatedly talked about by Wolfe Herd, and it is more generally one of the key topics of the IT world.
They support the Startups column
2023-11-14 08:54:47
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