Bumble IPO: The woman behind dating app making market history.

When the dating app was founded by Bumble founder and CEO Whitney Wolfe Herd in 2014, she decided to address a real-world relationship dilemma of the 21st century: finding love for the millions of women waiting around for men. So she turned conventional dating norms upside down, creating an app launched by women, led by women, and women who, by allowing women to make the first step, challenged age-old gender norms.

Almost seven years later, after raising $2.2 billion in an initial public offering that met expectations and priced the firm at over $7 billion, the company prides itself on its female-first strategy, which soared in its opening trade on Thursday, acquired a devoted following. It had about 42 million active users looking to find love with the swipe of a finger as of the third quarter of 2020. Bumble can now also boast of being a part of a small yet growing list of IPO female-founded businesses, including Katrina Lake, founder of Stitch Fix, and Julie Wainwright, of RealReal.

“On Thursday morning, Wolfe Herd told CNBC’s Squawk Alley, “We just got up every single day in the morning and concentrated on creating an experience around people, with women. “When women are safe and happy, everyone else follows them, and everybody creates a better relationship.”

Because of the lack of diversity in the boardroom and power-wielding roles, Corporate America and the technology industry have come under fire. According to the Pew Research Center, only 6 percent of businesses in the S&P 500 have a female CEO, including General Motors, Oracle, and Ulta Cosmetics. However, they are still in short supply, although the number doubled between 2007 and 2017.

Recently, Nasdaq, where Bumble lists its shares, filed a proposal with the U.S. Commission on Securities and Trade, including all U.S. firms. Nasdaq Exchange to share information on diversity-related to their board of directors. Last month, Goldman Sachs said it wouldn’t take public companies if they didn’t have at least one separate board member.

In recent years, venture capital funds have emerged, emphasizing financing women-led start-ups, including the Female Founders Fund, Golden Seeds, and the Intel Capital Diversity Fund, which focuses on under-represented technology entrepreneurs. In contrast, organizations such as All Raise have emerged to address these inequities.

“There’s a flywheel of mostly white men funding white men right now,” said Pam Kostka, CEO of the group. We have a boy’s club going on, and the circle of control is self-reinforcement. We need to be the next flywheel, what needs to happen.

As investors will draw diversity, she said, growing support for female and minority entrepreneurs begins by placing them in the boardroom and venture companies. But there is still a long way to go for the industry to reach equal financing, and it could take years to see results.

In 2020, according to data from Crunchbase, as U.S. venture-backed start-ups raised record amounts of money, support for female entrepreneurs dropped to a three-year low. Anu Duggal, a founding partner at the Female Founders Fund, said that seeing more “role models” such as Wolfe Herd bringing their businesses to IPO will help.

Women sometimes…… They’re not taken as seriously,” said Duggal. “What she’s proven, I think, is that you can put women first, and behind that, you can build a huge business.”

The majority of Bumble’s board is female. The board included lawyer Michele Kennedy, who founded Peanut in 2017, an app that links moms with more than a million users looking to find new mom mates. Ann Mather, formerly CFO of Pixar Studios and on the board of companies including Alphabet, Netflix, and Airbnb, joined Bumble’s board last year.

The company also launched its fund in 2018, with Serena Williams as an investor, which focuses on early-stage investments in companies founded and led by women of color and underrepresented groups.

“Wolfe Herd said of Bumble Fund in a 2019 interview with the Female Founders Fund, “Our mission is to be another voice pushing for more participation in women-owned companies and encouraging others to take part in getting incredible women entrepreneurs into the heavily-skewed venture capital ecosystem.

Wolfe Herd is no stranger to applications for dating. The 31-year-old entrepreneur worked at Tinder, the dating site well-known in Gen-Z and millennial hookup culture and a problematic rival to Bumble, before launching Bumble. The then-22-year-old joined Hatch Laboratories, a Los Angeles-based start-up incubator owned by IAC, shortly after graduating from college. She started working with peers on what later became Tinder, where she worked as vice president of marketing.

Face-to-face with #MeToo era issues

Bumble and Wolfe Herd’s past directly challenged the #MeToo age reckoning. Wolfe Herd resigned from Tinder in 2014 and filed a suit against the company and fellow executives for sexual harassment and discrimination. The company officially settled later that year for nearly $1 million and equity awards.

Wolfe Herd explored becoming a female-focused business in the #MeToo period during a 2018 interview with TechCrunch Disrupt. She said that society has started to normalize the meaning of equality and that women’s empowerment is something that the organization was “so excited about.”

Wolfe Herd said, “It’s something we’ve been waiting for and fighting for a long time, so it’s a phenomenal tidal wave happening where women feel empowered to use their voice, and they’re not afraid, they’re not ashamed.”

According to an interview with Business Insider in 2015, Wolfe Herd tried to create a rival to Facebook’s Instagram targeted younger generations after leaving Tinder. But she was persuaded to rejoin the dating scene after interacting with Andrey Andreev, the co-founder of a dating app named Badoo, whom she met while working at Tinder.

Bumble was founded with an initial investment of $10 million from Andreev Andreev. According to Forbes, some former Tinder employees, including co-founder Chris Gulczynski and Wolfe Herd, were named CEO with an estimated 20 percent stake. After a Forbes report alleging a toxic and misogynistic atmosphere at Badoo’s London headquarters, Andreev later came under fire; he retained an outside company to investigate the allegations and maintained that many of the charges were “inaccurate.”

Nevertheless, in 2019, when the company acquired a majority stake in the then-parent company of the network, MagicLab, which priced the company at approximately $3 billion, sold his estimated 79 percent stake to Blackstone Group.

The growth of Bumble and the increasing competition with her former Tinder business eventually led to attempts to purchase the start-up, which were refused, and a lawsuit involving Match Group, Bumble, and Tinder’s parent company. That fight included an open letter Bumble wrote in response to allegations of patent infringement, which echoed the MeToo movement’s empowerment by saying “Dear Match Group” to Tinder’s parents. We swipe at you on the left. In your various attempts to buy us, copy us, and, now, bully us, we swipe left. Never will we be yours. We’ll never compromise our values, no matter the price tag. … We are not afraid of hostile corporate culture as a woman-founded, female-led organization. This is what we call bullying, and we swipe at the bullies on the left.

Although she refused to comment on particular obstacles she has encountered in the past, on IPO day, Wolfe Herd told CNBC that “this is a moment that should serve as an example to anyone who feels like they have reached the end of the road…” An opportunity to get back up and repair yourself and reinvent yourself is always open.

The battle with Match and Tinder

Bumble recorded sales of approximately $376.6 million and a net loss of $84.1 million between Jan. 29 and Sept. 30, slim gains compared to rivals such as Match, which dominates the dating industry with the highest-grossing app Tinder and websites such as Hinge, OkCupid, and Match.com, and reported net revenue of $132.1 million and revenue in just the third quarter of approximately $640 million.

According to a Wall Street Journal article in September that argued that Bumble has “a way to go” to compete with Tinder platforms in the international market, Bumble’s emphasis on women could restrict its growth potential.

“The bottom line is that the vast majority of users of dating apps are men and that fact alone makes a platform like Bumble, which is very female-focused, inherently market-limiting,” Laura Forman, a WSJ columnist, told Squawk Alley of CNBC.

The platform was introduced in India in December 2018, backed by actress and Bollywood star Priyanka Chopra Jonas, a risky venture given the overwhelmingly negative view of the country towards casual dating. Wolfe Herd named India with sometimes “misogynistic” histories “wide-open prairies” for the company in an interview with the CNN Sector.

(L), with Bumble founder and CEO Whitney Wolf Herd, (R), Indian actress and Bumble investor Priyanka Chopra, (L), seen posing for a photo at Soho House, Juhu In Mumbai, Bumble’s India launch party.

Beyond the dating market, Bumble has grown. Within two years of its formation, with Bumble BFF’s launch in 2016, it created a friendship-building platform, followed in 2017 by the networking and mentoring platform Bumble Bizz. Both offers build on the current swiping algorithm to allow users to build connections and share resumes or job samples in the case of Bumble Bizz.

Networking giants like Microsoft’s LinkedIn have not overtaken Bumble Bizz; it has become a forum for recruiters to search for female applicants for future positions. The business further expanded the offering with Women in Bizz in 2019, a feature that enables users to filter out men from possible networking ties. Bumble announced a collaboration with the global esports organization Gen.G the same year to fund the first all-female gaming team on the network, including several Fortnite professional players.

The female-focused business has also not shied away from taking a political stand amid its short existence. Bumble banned weapons images from its website in 2018, following a string of mass shootings and demands for gun control nationwide.

The forum most recently banned body shaming. According to a blog posted on the company’s website, this includes language posted through Bumble’s chat feature or profile setting. “On or off the Bumble app, body shaming is not acceptable,” the post read, adding that perpetrators will be prohibited from the site.

The pandemic and online dating

Bumble has seen an increase in users since the pandemic, including Tinder and Hinge, as lonely singles seek to fill their time and explore love during national lockdowns and shelter-in-place orders. In New York City last March, Bumble posted a 23 percent rise in sent messages and a 26 percent rise in San Francisco in just ten days.

It also began to deliver in-app video in the middle of Covid-19 to enable users to interact from their home’s confines. Users can now introduce a virtual dating badge via a video call that shows a willingness to date; they can also exchange audio voice notes and extend distance filters to fit anyone nationwide.

“During this time, we are very alienated and isolated, and being able to keep the globe a little more connected while they have to stay physically distant is all we are focused on right now,” Wolfe Herd told Closing Bell of CNBC in May 2020.

While physical dating will return in the long run, she added that the pandemic allows users to spend more time getting to know each other before “hopping into a coffee shop or bar,” which adds to the level of safety and security that the platform has been working to build since the beginning.

Wolfe Herd said, “We fundamentally believe that physical dating does not go anywhere; it serves a truly valuable place in the lives of people.”

“In 2019, WSJ’s Forman called the company’s 70 percent revenue growth “eye-popping,” but argues that it is slim compared to Tinder, which grew 138 percent in the “age equivalent era.” Women, she added, want to be on the platform where most men are, and while Bumble’s female-driven first-move could be a “fantasy” for some men, it’s “a hard sell.

Besides Match, Bumble also faces possible challenges from the technology giant Facebook, which recently joined the social networking platform’s dating scene with added functionality. “But Wolfe Herd is unfazed, and in a 2019 interview with CNBC’s Squawk Box, called the technology company’s announcement “incredibly validating.

“The fact that the word dating is finally owned by a giant like Facebook is incredible for us because it’s ultimately at the core of what we all do,” she said.

There is a long way to go for the VC culture as it tries a more diverse new generation of Facebook IPOs than the last one. Females account for just about 13 percent of VC decision-makers, and, although the number is increasing, according to All Raise, 65 percent of companies still lack any female partners.

I believe the message we’re trying to send is that let’s respect each other, and you can be a successful technology business with high sales figures and do something progressive. It’s not one or the other,’ in 2018, Wolfe Herd told NBC News.

At 31, Wolfe Herd is the youngest female founder on the incredibly short list of women founders who led IPOs to take a U.S. company public. On Thursday, she told CNBC, “This should serve as an example that anything is possible, and I am so excited to hand the baton over to the next woman who, as the youngest woman, surpasses me.”