Tag Archives: Independent IPO Research

Bumble: A Different Kind of Dating Platform

Bumble logoBumble (NASDAQ: BMBL), an online dating and social networking platform, was founded in 2014 by Whitney Wolfe Herd. Headquartered in Austin, Texas, with offices in Barcelona, London, and Moscow, Bumble was created with women at the center; a dating solution where women make the first move. Bumble is rewriting the script on gender norms, with a platform designed to be safe and empowering for women while also providing a better environment for all. Bumble utilizes innovative technology solutions to build a safer and more inclusive way to connect online, regardless of gender. Consensus estimates call for the company to generate revenue of $724 million this year, with profitability bordering on break-even.

Bumble debuted on the NASDAQ on February 11th, 2021, in a 57.5 million Class A common stock offering, priced at $43 per share. Bumble’s pre-IPO balance sheet consisted of $218 million in cash with $628 million in debt. When added to the $2.5 billion raised from the offering, Bumble possessed close to $2.7 billion in cash with $628 million in debt immediately after the offering. With a recent share price of $60, Bumble carries a market cap of approximately $11.2 billion.

Bumble’s platform enables users to connect and build healthy relationships on their own terms. Further, Bumble believes there is an opportunity to extend its solutions beyond dating, to encompass relationships across all areas of life, including friendships, careers, and more. By empowering women across all their relationships, Bumble feels it can grow into a leading global women’s brand.

Bumble currently operates two apps, Bumble and Badoo, where more than 42 million users come every month to discover new people and connect in an empowering, secure, and safe environment. These two apps run on a common infrastructure, allowing insights to be shared between the apps. Bumble believes this is an integral piece in providing its users with high-quality and personalized experiences. Bumble facilitated an average of more than 150 million messages sent per day across its two apps in the nine months ended September 30th, 2020.
The Bumble app was released in 2014 and was one of the first dating apps built with women at its core. With Bumble, women make the first move, and have done so more than 1.7 billion times since the app’s launch. Bumble supports roughly 12 million monthly active users, and is the second highest grossing dating app in the world, according to Sensor Tower. Bumble is a leading online dating platform in many countries, such as the United States, the United Kingdom, Australia, and Canada. During the nine months ended September 30th, 2020, Bumble boasted 1.1 million Bumble App Paying Users.

The Badoo app was founded by Andrey Andreev and first launched in 2006. This app was a pioneer in free web and mobile dating products. Badoo’s slogan of “Date Honestly” deeply connects to Bumble’s focus on building meaningful relationships for everyone. Bumble and Badoo are two of the highest grossing online dating apps in the world. According to Sensor Tower, as of August 2020, Bumble ranked in the top five grossing iOS lifestyle apps in 30 countries, and Badoo ranked among the five highest grossing iOS lifestyle apps in 89 countries.

Dropbox has evolved into a cloud-based content management software company

Dropbox: Keeping Teams in Sync

Dropbox-logoFounded in 2007 by Andrew Houston and Arash Ferdowsi, and based in San Francisco, Dropbox (NASDAQ: DBX) provides a cloud-based content collaboration software platform that enables users to share, synchronize, and access digital files. Consensus estimates call for revenue of $1.3 billion and EPS of $0.20 in 2018, followed by $1.6 billion and $0.31 in 2019.

Dropbox debuted on the NASDAQ on March 23, 2018, in a 36 million Class A share IPO priced at $21, with 26.8 million shares offered by the company, and roughly 9.2 million shares sold by selling shareholders. Thus, the company netted roughly $540 million in the process. The IPO was led by a veritable army of 12 investment banks, including Goldman Sachs, J.P. Morgan Securities, BofA Merrill Lynch, Deutsche Bank Securities, Allen & Company, RBC Capital Markets, and others. Post-offering, there are 53 million Class A shares and 339 million Class B shares for a total of roughly 392 million shares outstanding. At a recent share price of $30, Dropbox’s market cap is roughly $11.8 billion.

With over 500 million registered users, Drop Box has created a digital collaboration platform that enables consumers and businesses to share, synchronize and access digital files. It does so by utilizing proprietary block-level sync technology to speed the process of file uploads and downloads. The company embeds multiple levels of redundancy and security to protect against data loss. Dropbox helps geographically-dispersed work teams stay in synch and share files, a feat which is increasingly important to businesses of all sizes, as 30 percent of full-time employees work primarily on a remote basis, with 20 percent of the workforce comprised of temp workers, contractors, and freelancers, according to a 2016 Deloitte study. Dropbox currently stores over one billion gigabytes of data.

Dropbox is a pioneer of the “freemium” business model, through which a company offers a free version of its product, and attempts to up-sell and cross-sell customers to paid plans. Of the company’s 500 million registered users, 11 million are paying customers. Dropbox offers two subscription services for individuals and microbusinesses, and three plans for businesses. Of the 11 million paying users, 30 percent subscribe to a Dropbox Business plan, while 50 percent of subscribers to its individual plans use Dropbox for work purposes.

Dropbox is as much focused on converting free members to paid memberships as it is converting lower-tier paid subscribers to its higher priced, and more feature rich plans. 40 percent of new Dropbox business teams included a member who was previously a subscriber to a paid individual plan. 300 million of the company’s 500 million users are, according to Dropbox, “more likely than other registered users” to pay over time, based on Dropbox’s analysis of their email domains, devices, and geographies.

Dropbox recorded revenue of $1.1 billion in 2017, growth of 31 percent over the prior year. The company’s gross margin improved to 67 percent, from 54 percent a year earlier. Dropbox narrowed its operating loss from $194 million in 2016, to $114 million in 2017. As the majority of customers opt for an annual plan, Dropbox typically bills customers at the beginning of their subscription term, and thus generates a fair amount of cash up-front. Thus, the company has been free cash flow positive for each of the last two years, with free cash flow of $137 million in 2016, and $305 million in 2017.