Girls-led app Bumble’s 31-year-old founder is now a billionaire | Arts and Tradition Information
A woman-caring company, run by women, made its 31-year-old founder a billionaire.
Bumble Inc., the owner of the dating app where women are taking the first step, sold shares on their upcoming trading debut for $ 43, valued Chief Executive Officer Whitney Wolfe Herd’s stake at over $ 900 million, and raised their total assets to over $ 1 billion.
The listing contains a saga that is both an inspiration and a cautionary story for tech founders. Wolfe Herd took advantage of an underserved market and built a billion dollar business that, in some ways, emerged from one of the biggest obstacles facing women entrepreneurs: sexual harassment.
“This is a huge win,” said Allyson Kapin, general partner of investment firm W Fund and founder of the Women Who Tech network. “Whitney saw an opportunity that wasn’t addressed for women and her expertise made it into this gold mine, not just for her and her team, but for her investors as well.”
A spokesman for Bumble declined to comment.
Bumble’s IPO turns Wolfe Herd into a rare club of self-made billionaires. While women make up about half of the world’s population, self-made women – mostly from Asia – make up less than 5% of the world’s 500 largest fortunes, according to the Bloomberg Billionaires Index. Homemade men make up almost two thirds of the wealth index.
Of the 559 companies that went public in the US in the past 12 months, only two were founded by women besides Bumble. It is similar with blank check firms, the vehicle of choice today for increasing wealth on Wall Street. Women-sponsored SPACs made up fewer than a dozen, a fraction of the 349 listed last year.
That means women are largely left behind in what is likely the fastest wealth creation boom in history. Last year, the world’s 500 richest people made $ 1.8 trillion, but according to the Bloomberg Index, 91% of that profit went to men.
Among the numerous barriers facing women and other underrepresented groups in the startup world, including people of color, harassment is one of the most prevalent. A Women Who Tech survey last year found that 44% of women founders surveyed said they had been harassed at work, with more than a third of that group being subjected to sexual harassment.
It was, in fact, harassment that spurred the creation of Bumble. Wolfe Herd founded the Austin, Texas-based company in 2014 after leaving Tinder, the rival dating app she co-founded. The breakup was violent, marked by a sexual harassment lawsuit against Wolfe Herd filed against the company. She alleged, among other things, that she was repeatedly called derogatory names by executives and deprived of her co-founding role since having a “girl” named “Brands” seems to be a joke. “The lawsuit was later settled.
The experience was formative. She initially wanted to create a women-only social network where women could send compliments to each other, but focused on match-making on the advice of Russian tech billionaire Andrey Andreev, founder of dating app Badoo.
With Andreev’s support, Wolfe Herd created Bumble as a “women for women” ministry that was touted as a place where women were empowered and harassment was closely monitored. It has become the second most popular dating app in the US, using ads with buzzwords like, “Be the CEO your parents always wanted you to marry.”
Wolfe Herd acquired Andreev when Blackstone Group Inc. acquired a controlling stake in Bumble’s owners last year for approximately $ 3 billion. As part of the deal, Wolfe Herd received approximately $ 125 million in cash and a $ 119 million loan that it has since repaid in full. Bumble Inc., the holding company of Bumble and Badoo, is now valued at approximately $ 8 billion.
“I felt very comfortable giving Whitney the baton,” Andreev said in an email. “She has proven to be very insightful and innovative in the dating field.”
Wolfe Herd’s partnership with Andreev helped her overcome a major obstacle for women-led, women-centered startups: funding. According to Pitchbook data, less than 3% of venture capital dollars goes to women-owned startups, a number that has barely changed in the past decade.
The tendency for venture capitalists to fund what they know and who is on their network adds to the gap. And that’s despite the evidence that women-led startups actually generate better returns than those started by men. Studies by the Kauffman Foundation, MassChallenge, and BCG found that companies founded by women generated more revenue and were far more capital-efficient.
“It’s not about charity, it’s about making a ton of money,” said Kapin of Women Who Tech.
Another high profile listing on the horizon is that of Honest Co., a baby and beauty products company co-founded by actress Jessica Alba, which is reportedly preparing to go public.
Women in the startup world are optimistic about a rising tide. “Whitney’s success will help invest in companies that serve a female audience or are founded by women,” said Kelsi Kamin, Austin venture capitalist. “It’s a super exciting time.”