The American dating app Bumble, which is led by women, has made its 31-year-old female founder a billionaire.
The owner of Bumble app, where women have the privilege to make the first move, sold shares in its upcoming initial public offering (IPO) debut at $43, valuing Chief Executive Officer Whitney Wolfe Herd’s stake at more than $900 million and taking her overall fortune to above $1 billion.
Ms. Wolfe Herd’s achievement is both an inspiration and cautionary tale for women tech founders. She capitalized on an untapped market and built a multibillion-dollar company.
Whitney founded Bumble in 2014 following her departure from Tinder, the rival dating app she helped found. The split was marked by a sexual harassment lawsuit she filed against the company, alleging that she was repeatedly called derogatory names by executives and stripped of her co-founder role since having a “girl” with that title “makes the company seem like a joke.”
Self-made female billionaire
Bumble’s IPO launches Ms. Wolfe Herd into a rare club of self-made female billionaires. While women make up about half of the global population, self-made women, mostly from Asia, account for less than 5 percent of the world’s 500 biggest fortunes, according to the Bloomberg Billionaires Index. Meanwhile self-made men comprise almost two-thirds of the wealth index.
Women are largely being left behind in the wealth-creation category. Last year the world’s 500 richest people gained $1.8 trillion, yet 91 percent of that increase went to men, according to the Bloomberg index.
Ms. Wolfe Herd initially wanted to create a female-only social network for women to send each other compliments but ended up focusing on match-making on the advice of Russian tech billionaire Andrey Andreev, the founder of dating app Badoo.
With Mr. Andreev’s backing, Ms. Wolfe Herd created Bumble as a service “by women, for women,” describing it as a place where women are empowered and harassment was rigorously policed. It’s become the second-most popular dating app in the US with the help of advertisements bearing tag lines such as: “Be the CEO your parents always wanted you to marry.”
Ms. Wolfe Herd’s partnership with Andreev helped her overcome a key obstacle to women-led, women-focused startups which is – funding. Global data suggests that less than 3 percent of venture capital amount go to startups founded by women, a figure that’s barely changed over the past decade.
The tendency of venture capitalists to fund men-led startups is despite the fact that women-led startups actually produce better returns than those founded by men, according to statistics. Studies by the Kauffman Foundation, MassChallenge and BCG found that female-founded companies generated more revenue and were significantly more capital efficient.
Wave of change
Women in the startup world are optimistic about a rising tide. “Whitney’s success will help further the case for investing in businesses that serve a female audience or that are founded by women,” said venture capitalist Kelsi Kamin. “It’s a super exciting time.”