A 2019 IPO for Bumble Trading Inc. could see it become one of the most desirable tech stocks in the USA, argues Profit Confidential analyst Stephen Karmazyn.
The feminist app’s public offering was initially set to land before 2019, but it may have been moved in an attempt to hit its desired $1.5 billion valuation. Implementing advertisements is one revenue-boosting strategy Bumble has been exploring.
If Bumble does end up going public at a lower valuation, such as the $1.1 billion predicted by Bloomberg, it could see massive investor interest as its prospects for user growth are incredibly strong. In around 20 months, the user base has increased from below 15 million to over 40 million, and the app has just landed in India.
“We are at our annual run rate of $200 million for 2018, and we’re only in year three,” said Bumble CEO Whitney Wolfe Herd, speaking to CNBC.
“We’ve been a profitable business since year two.”
Karmazyn notes that Bumble can be favourably compared to Snap – the latter saw its value decline following an IPO because of a lack of monetisation. Bumble has a strong subscriber base, however, and is well placed to capitalise on a large (and wealthy) user population.
He says: “[A] Bumble IPO could be one of the strongest IPOs in the tech sector, with the potential for 30%–50% gains in a short period.”
This month, Bumble introduced a set of freemium filters. Users will be able to sort profiles on one or two characteristics with a basic account, but will need to upgrade to make full use of the functionality.
Read more here.