Update: Amid the reshaping of the online dating industry landscape, Bumble approves the $1.3 billion privatization deal.

Added details and background information about BlackStone Group.

Harshita Mary Varghese

Reuters, October 13 - As the online dating industry continues to be hit by declining user numbers and changing dating habits among Generation Z, Bumble (BMBL.O), after years of unsuccessful attempts to revive growth, is set to go private in a $1.3 billion deal with Ithaca Holdings.

Following media reports (link) and a deal with Ithaca Holdings, the company's stock surged 50% on Monday, and in early trading on Tuesday rose another 56%, reaching $5.95.

Bumble and its larger competitor Match MTCH.O (which owns Tinder and Hinge) have been facing declines in user engagement, as younger users grow increasingly weary of endless swiping on apps and instead seek more natural ways to connect.

So far , Match has outperformed Bumble with its suite of apps targeting specific segments and the international growth of Hinge—the latter attracting users with its detailed, relationship-focused profile format.

Bumble said that, upon completion of the acquisition, Ithaca co-founders Ravi Gupta and John Hegeman will become co-CEOs of Bumble.

The company’s offer to acquire Bumble is $6.05 per share, a 122.4% premium over the closing price on June 24 (the day before Reuters' exclusive report (link) revealed the company was exploring a sale).

https://www.reuters.com/graphics/BUMBLE-STOCK/gkpleammevb/chart.png

Bumble was founded by Whitney Wolfe Herd in 2014, pioneering a "women-first" approach to online dating, a hallmark of the company. This year, however, it has rolled back this feature to improve user retention.

Under Herd, who stepped down in 2023 and will return as CEO in March 2025, the company tried various approaches, including hiking prices, extending response time windows, adding AI tools to help users write messages, and holding in-person events to boost user engagement.

In addition, to relieve user fatigue with the traditional swiping matching model, the company has also been testing a new AI matchmaking assistant.

However, these efforts have failed to revive the company. In the second quarter, the total number of paying users (link) dropped 16.4% to 3.2 million, and its quarterly revenue has declined for nearly two consecutive years.

As of Monday’s close, Bumble’s market value had shrunk to about $582 million, a far cry from the $14 billion valuation when it went public in 2021.

“It’s been a while since there’s been innovation in dating spaces, but now with artificial intelligence arriving, these apps will be forced to innovate,” said Liesel Sharabi, associate professor at Arizona State University, who studies online dating and relationship technologies.

According to LSEG data, shareholders BlackStone Group (BX.N), which owns about 14% of Bumble, and Herd have provided the necessary shareholder approval for the deal.

(To make its reports accessible to non-native English speakers, Reuters has automatically translated this report into several other languages. Automated translation may contain errors or lack necessary context; Reuters does not guarantee the accuracy of the automated text and provides it solely for reader convenience. Reuters is not responsible for any damage or losses caused by the use of automated translation.)