LONDON—The owner of dating app Bumble said it plans to spend $100 million creating an array of new dating apps, part of an expansion and revamp of the privately held holding company that also owns Lumen, a dating app for people over 50, and gay-dating app Chappy.
the Russian billionaire behind Bumble—a popular dating app that puts the onus on women to initiate a conversation that could ultimately lead to a date—said he is renaming the London-based holding company that oversees it and three other similar properties as Magic Lab. In an interview in London, he said he would invest heavily to recruit talent to his organization and encourage developers to bring new ideas his way.
“We’re looking for the big, big monsters who can partner with me,” he said.
The promised investment represents a challenge to rival
Match Group Inc.,
the New York-listed owner of online dating giant Match.com and fast-growing dating apps Tinder and OkCupid. Match shares are up strongly this year, despite some investor worry after
App-based dating has resonated among younger users, while catching on among older ones, too. Mr. Andreev’s businesses and Match have both branched out to appeal to niche groups of daters. Match, for instance, has rolled out apps for people with pets (PetPeopleMeet.com) and members of the Mormon Church
The rival dating giants have circled each other for years. In 2014, Mr. Andreev reached out to
Whitney Wolfe Herd,
a co-founder of Tinder, who had just left amid a high-profile sexual-harassment suit. The two sides settled the same year.
Mr. Andreev and Ms. Wolfe Herd, with several other colleagues, sequestered themselves in a villa in Greece and came up with the idea of Bumble, now based in Austin, Texas. In 2017, Ms. Wolfe Herd graced the cover of Forbes magazine as the “Queen Bee of Dating.” Mr. Andreev, 44 years old, has mostly stayed in the background.
Last year, Match offered to acquire Mr. Andreev’s group of companies, but Mr. Andreev declined, according to people familiar with the matter. The deal talks valued the umbrella group at roughly $1 billion, according to one of these people.
Months later, Match filed a lawsuit against Mr. Andreev’s holding company, alleging that Bumble had copied features from Tinder. Mr. Andreev declined to comment on the suit.
In the interview, he said his plan to spend money on building new apps organically is a more efficient approach than Match’s. Match has been acquiring companies, though it developed Tinder in-house.
“Match traditionally buys things,” Mr. Andreev said. “We don’t have M&A specialists here. We’re building this stuff.”
Both companies make money from recurring subscriptions for their sites and apps. Match revenues totaled $1.7 billion in 2018. Magic Lab’s annual revenue run rate—an estimate based on current financial performance—is just under $500 million, the company said.
Magic Lab houses four brands: Bumble, Lumen, Chappy and Badoo. Mr. Andreev founded the first of these businesses, Badoo, a decade ago. It is popular in Europe. Before the rebranding, the holding company was called Worldwide Vision Ltd. Mr. Andreev said he and his management team own 80% of the holding company. Russian private-equity firm Finam Global holds a 20% stake in Magic Lab.
Born in Moscow, Mr. Andreev moved to Spain when he was 16, where he used money borrowed from his parents, both scientists, to start an early e-commerce website selling computer equipment. He launched Badoo in 2006 as a social network.
Corrections & Amplifications
Magic Lab, the owner of the Bumble dating app, has an annual revenue “run rate” of just under $500 million, based on current financial performance. In an earlier version of this article, Magic Lab’s chief executive incorrectly said 12-month revenue was over $500 million. (July 11, 2019)
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