3. Bumble Inc. (NASDAQ:BMBL)
Market Capitalization as of September 11: $797.20 million
Number of Hedge Fund Holders: 26
Bumble Inc. (NASDAQ:BMBL) is essentially a dating app with additional features (for friendship and networking) that enable people to build healthy and equitable relationships, through kind connections. It primarily focuses on women making the first move for female empowerment and safety reasons.
In July, it acquired Geneva, a group and community app. The company is working on launching it more broadly later this fall.
The company is also working on introducing new AI-driven features, including an AI-assisted photo picker and conversation support. Cracking down bad actors and adding government ID verification is going to impact monthly active users for the short term is but a great safety and support strategy for the long term.
Total revenue for Q2 2024 was $268.62 million, up 3.42% year-over-year. Total paying users grew 14% to $4.1 million, offset by an 8% year-over-year decrease. Bumble app revenue grew 5%, while the Badoo app and other revenue declined 2%. As of August 7, the company also repurchased $84 million of its shares year-to-date.
Bumble Inc. (NASDAQ:BMBL) has taken several steps over time to improve the Bumble App experience for women. They have launched new features, refreshed the look and feel, and improved onboarding and profile creation. These changes have led to increased engagement and better experiences for users.
By focusing on key areas like ecosystem health, customer experience, and revenue strategy, the company is well-positioned to achieve its goal of becoming the leading choice for dating, friendship, and community. As of June 30, 26 hedge funds held long positions in the company, of which the highest stake is valued at $26,595,450 by Citadel Investment Group.
Polen Global SMID Company Growth Strategy stated the following regarding Bumble Inc. (NASDAQ:BMBL) in its Q2 2024 investor letter:
“We exited our position in Bumble Inc. (NASDAQ:BMBL), a global leader in the mobile dating app space, due to several Flywheel violations. We initially entered this position roughly two years ago due to the founder-led management team, the robust brand of their key Bumble asset, the opportunity to expand Bumble globally, and the attractive margin and free cash flow profile. Over the last year, the founder has taken a step back from the business into an Executive Chairman role; the COO left to become CEO of another tech start-up, and a new CEO has made several material changes to the general management structure and will be introducing significant changes to the company’s core products. According to management and third-party data, the “swipe” dating apps are struggling to grow downloads in key markets and need a product refresh to reinvigorate growth, perhaps leveraging new Al technologies to enhance user experience and matching capabilities. Together, the new management team and the app “refresh” introduce a level of execution and reinvestment risk that violates our Flywheel. The company remains a leader in the dating space and highly profitable, but we believe it prudent to watch how this business evolves from the sidelines.”
