Bumble Inc. (BMBL) Earnings Call Transcript & Summary

Good afternoon, and good morning, everybody, and welcome to this closing session of our first day at our Disruptive Technology Symposium brought to you live from New York City. I hope you've enjoyed the day so far hearing from many exciting founders and learning about their businesses and how they're disrupting the status quo. I have no doubt they will enjoy our second day tomorrow. In the meantime, I'm thrilled and honored to be joined by a disruptor in her own right, my good friend, Whitney Wolfe Herd, the Founder and CEO of Bumble. Bumble, as you all know, is a social and dating app with over 40 million users globally. As many of you know, Bumble IPO-ed in February of this year. And with that, Whitney became the youngest female CEO to take a company public at the age of 31. Before founding Bumble in 2014, Whitney was a co-founder of Tinder. So Whitney, thank you so much for joining us today. I'm thrilled to have you here. Let's just dive right in as I know our audience is so excited to hear about your story and the tremendous success of Bumble.

Thanks, Kim. It's great to be here. So good to see you.

So let's start with -- you started Bumble and how you started it was truly inspirational. For those of you not familiar with the story, can you tell us a bit about how you started Bumble, and talk to us a bit about Bumble's mission?

Sure. So bumble came to be at a time where women really were not the focus of social media platforms or dating products. And I had noticed these 2 critical issues or rather areas of white space back in 2014. And the first was this critical need for a kinder, more accountable, safer digital ecosystem. If you looked across the landscape, women were being inundated across all of these social media platforms, and they did not find these platforms safe or accommodating to their wants and needs. And the second issue was if you looked at this rise of digital dating, it was this incredible product and offering, and it was serving so many people and helping them find love and relationships, but all of the products on the market were really catered and geared towards men. And so this huge white space of women had just been overlooked. And so it was really the collision of those 2 challenges or problems that came together and really created the beginning of Bumble and for those of you that are not familiar, on Bumble app, contrary to thousands of years of culture and also the digital landscape instead of the traditional format of predominantly men making the first move in a hetero sexual connection, women must initiate conversation, they must make the first move, and this has led to incredible business metrics. This has led to a very, very trusted brand by women. And when women are on a product that is safe and kind and accountable, men also follow. So our metrics have really -- have proven the strength of this offering, and it's really been an incredible journey so far.

It's been amazing. So much has changed in the way we as humans connect with each other since you started Bumble in 2014, virtual connectivity, by the way, the pandemic has accelerated that. But it's in every facet of our lives and it's now commonplace. How has the mission evolved over time to adapt to that?

Yes. So it's interesting. We've always been saying this. From 2014 when we started, even when there was still some resistance or hesitancy to meet people online, that has completely transformed over the last several years. That's so common. Actually, back in 2017, over 40% of couples met online, and that was 2017. That number has only accelerated at such a rapid degree, and it's going to continue to accelerate. Not only that, but what we've been saying from day 1 is that we want to be a product and a platform and a brand that helps facilitate and create healthy and equitable relationships, we want to give you access to people around you. And Fate is great, but Bumble is faster. And that's been the saying of ours. And so as the world has gone more digital, our business has only continued to accelerate, and it will only continue to accelerate here forward. And what's really exciting and interesting is we took a big bet back in 2016, early in our Bumble growth story, and we said, "You know what? There is going to be this huge demand for platonic relationships." Social discovery for nonromantic purposes is going to be the next horizon. So we were actually the first out of the gate to build a friend-finding product. And now today, even with very minimal investment, actually 0 investment from a product and resourcing standpoint and from a marketing standpoint, which we are now optimizing and about to revamp, but we have over 10% of our dating community using the platonic friend-finding feature, which just goes to show this huge demand for community and friendships and all sorts of platonic relationships. And It's really this economy of relationships that we're serving and that just means our TAM is exponentially wider than I think even investors today realize because when they look at the dating TAM, it's expected to be $10 billion by 2023, but that's just dating. When you start to layer social discovery, business relationships and all of these photonic connections, that just blows it to a whole new -- takes it to a whole new level.

So tell us a bit about the partnership with Badoo. So for those of you who are not familiar, Badoo is a dating-focused social network. So tell us a bit about the evolution of the overall business since the partnership started?

Yes. So Badoo is actually an incredible product. It's a pioneering product in the dating app space, and it was the very first ever to offer premium model in the app store. And it's been one of the largest global players for a decade. And the maturity of that Badoo tech stack when I partnered with them in 2014, their infrastructure, their algorithm, this really created an exceptional foundation for Bumble App success. And that was really pivotal in managing our early growth and fueling our long-term success. And what's so exciting about these 2 products. Badoo really focuses on more of an emerging middle-class market. And that is such a wide market that needs love and connection and these folks are oftentimes shopped for time or resources to go out and meet people. And so Badoo serves this incredible opportunity. Not only that, but Badoo has remarkable scale in so many nations throughout Latin America and Western Europe, and this has given Bumble such an opportunity to learn from their data, from their use cases, from their product offerings. And so it's been a really great product innovation opportunity for us because we can test and we can share. And this is really what sets us apart from our peers and our competitors. If you look at some of the competitive landscape, they have multiple brands, multiple products, multiple tech stacks, but they don't work necessarily together. They're not using these separate tech stacks as learning engines as shared resources. And we really do share across our brands to really focus on different audiences and to fuel different use cases all under the same mission. So that's really exciting for us.

So another great partnership that you've had is with Blackstone. Tell us a bit about that relationship? How did it come about? How did Blackstone help you drive growth and achieve your mission?

Yes, of course. So as you can imagine, relationships are literally everything to us at Bumble. And that is really why we match so well with Blackstone. From my very first meetings with their team back in 2019, we knew that they were special. We knew that they were incredible and they were committed. And we knew that they wholeheartedly believed in our mission and me as the founder and our leadership team and as a business, they really share a lot of our core values. And so together, we just saw this massive potential to scale our business and to really double down on our investments in our product in a very exciting manner, and Blackstone's impact on the business was immediate and it remains really profound today. They have been instrumental in helping build out our world-class leadership team as well as supporting us possibly be fast as at the business and putting together an exceptional Board. They are remarkable people, and I just could not say -- I just could not think higher of them if I tried the remarkable.

So I mentioned earlier that Bumble went public in February of '21. It feels like 100 years ago.

I know. It's really pretty -- it feels like 500 years ago and 2 seconds ago, it's pretty.

So talk to us about what drove the timing of the IPO? What was your biggest surprise throughout the process? And then also, any lessons learned for our viewers, many of whom are entrepreneurs thinking about going public?

Yes. So going public for us felt like the right next step. We want to -- we have a brand that people resonate with. We have a product that is so consumer-driven, right? This is something that is in the hands of people everywhere, and we wanted to give the world an opportunity to share in our growth story. And we know that we're a very long-term business. This is not a 1-, 2-, 3-year business. This is a business that I fundamentally believe will outlet me, right? This is a legacy business, one that will transform the lives of women and people around the world when you think about the critical need for women globally to be empowered and respected in their relationships and to take the lead and to find love, and to find love on their terms in healthy and equitable ways, there's no shortage of that, right? There's over 3 billion women and when you think about that opportunity, it's just so extreme and the brand we've built has extensibility opportunities so far beyond dating that this is what we believe is a truly once-in-a-generation opportunity. And so going public felt like the right next step and it was such a remarkable, yet exhausting experience. And it was really ultimately just day 1. It felt like we had come to the end of the marathon, but what we realized is we were just tying our shoes and getting started, and we're so excited to build this incredibly long-term, very exciting vision and bring it to life. It's very -- it's fast, and it's global and it's just -- it's loaded with incredible impact for women around the world, and we're really excited to bring this to life over the decades to come.

So let's stay on the theme of women's empowerment. Only 21 companies have had women founders who led them to an IPO, now 22 with you and Bumble. How do you think we elevate more female leaders in tech and more broadly?

Yes, of course. So that is a staggering statistic. When I heard that for the first time, I was quite shocked. And It's quite simple. We just need to prioritize women. We need to prioritize women in business. And I think something that's quite remarkable about these businesses that women have led through IPOs is ones that have come before me. Women set out to solve problems. They really are problem solvers and they're passionate and they're committed. And so when you look at these businesses that have come before Bumble and with Bumble, these are businesses that were born out of true purpose mission and vision. And those are the businesses that can really transform the world. And I think if we would start prioritizing women, even if it's at the workplace or in the investment arm, it's just amazing what women businesses can do for the world, and we're seeing that right now. And I'm honored to be in the role I'm in. It's quite surreal, but I certainly hope there's many, many that come very soon after me and dethrone the youngest whatever thing. And I hope '22 is -- I hope that's a much bigger number very soon.

Well, I believe it will be. I know it will be. I also know that we have many entrepreneurs tuning in today. And as they all know, there's real challenges that arise when you're building a business from the ground up. Could you talk about some of the challenges that you faced along the way? And if you had to pick one, what's been the toughest obstacle so far for you?

Oh, goodness. Do I think about the challenges? So we don't have enough time -- anybody with that today.

I won't limit you.

But I would say the ultimate kind of fundamental challenge was convincing people that not only should women make the first move, but that they would make the first move. I cannot tell you how many people early on outside of our core team, laughed at this or said it would never work. I had even certain media personalities teasing me saying, "Oh, Whitney must like Bumble bee, is there something this woman-first thing." It was just crazy. But we just kept going and going and going. And when you think about this simple tweak that we engineered, not only just into our product but as a whole brand narrative, it's actually quite profound because women have never been told to go first, right, in societies around the world. And so why would the random person hearing about Bumble think that they should go for. So I -- with every innovation, everything that is innovative, everything that goes against the brain, people can't quite wrap their head around it and they think it will fail. And so I recognized that early on, and I just tried to remind myself of that every day and that's my advice to entrepreneurs is if you're doing something that's against the brain, if you're doing something innovative, if you're doing something different, you're going to be told no. So just expect it and let it fuel you, let it motivate you versus hold you back.

So we couldn't talk about challenges without talking about COVID. Could you talk a bit about how COVID impacted Bumble and online dating broadly? And then separately, maybe talk about what's next for online dating in a post-COVID world?

Right. So I'll never forget that March thinking to myself what is going to happen to this business, right, because we are in the business of helping people meet. And the entire world was told, you're not allowed to meet anyone for a long time. So it was a polarizing time, but luckily, we had taken a pre-COVID batch, which we were right on that video dating was part of the future, that video was part of the future. And as we were building it, a lot of folks said, why are you wasting your time building this. But we were convicted, our team was convicted that video would be the way people meet going forward. And lo and behold, as lockdowns persisted and as lockdown became more extreme, those video chats started to climb and climb and climb. I think the one fundamental truth that we can all walk out of COVID with is that, we as humans around the globe, no matter what pandemic or what lockdown or what end of the world scenario, we have to still find connection. We need community. We need love. We need friends. That is a fundamental human need, and that is what our business serves. And the fact that we were able to innovate and be prepared for something no one could be prepared for, with this video option, it really just sent us into a whole new orbit of success. We saw folks falling in love and building full-blown relationships digitally. They have not met. They would spend months just videoing and cooking dinner at their own respected homes across cities or across towns until they were able to finally meet. And so that -- this trend of, we are in the business of connecting people. That was not disrupted. It was just reinforced. And that goes to show just how durable our business is, right? We were an incredibly successful business pre-COVID and through COVID remained really strong. And new trends came from that, right? And so we actually think that COVID propelled the strength of this industry because it normalized meeting online, maybe 1, 2 years ahead of what would have happened had there not been a pandemic. And so the other exciting side of that is we're a post-pandemic business as well. As we see vaccination rates take off in certain cities and towns and even nations, the reengagement is really profound. We are seeing these customers come back in strides and getting ready to meet people again, and they want to meet and they want something more profound in terms of what they're looking for. So prior to the pandemic, there was, I would say, a large share of folks that wanted something casual. And we've actually seen this huge shift to something more serious, and that's really interesting. And I think COVID just reinforced the need for real, real good quality relationships. It's just exactly what we serve.

Yes, it's been amazing because COVID forced physical separation and then technology sort of drove more global connectivity in ways that I think surprised all of us. But so let's stay on the global connectivity theme. Maybe talk a bit about your global expansion roadmap sort of in this post-COVID world? And how has traction internationally looked since the IPO? How was COVID impacted the timing of that?

Sure. So turning to international. This is a huge priority for us. And we are still very early in our growth internationally, which is exciting, right? This is actually really exciting opportunity for our investors. They get to be a part of the growth story. They don't have to enter it later in the stage. We have strong existing communities in other English-speaking markets outside of the U.S., such as just the U.K., Australia and Canada. And in the last 1.5 years, we have made tremendous progress in many diverse non-English-speaking markets, such as Mexico, India, and these have all shown very strong growth rates in customers. Western Europe, in particular, in the DACH region has been incredibly robust in 2021 with several hundred thousand monthly active users, and we've seen our [indiscernible] grow triple-digit percentages in markets like Germany this year, which just goes to show that these markets with high ARPU, this is an important business for us, not just from a growth perspective, but also from a revenue growth perspective as well. And we're also seeing strong organic growth in markets such as Israel, the Philippines. And we've talked about this important message of women making the first move. And there were some skeptics early on that said, "Well, I think that might just be a Western thing." Women are a little more confident in places like the States. But what's fascinating is if you look at the equality index, when you take a nation like India or Indonesia and then you look at the opposite side of the Equality Index and you look at somewhere like Germany where women are quite progressive, the propensity to make the first move does not change. So this is a remarkable statistic that our message, our product offering is resonant with women across the globe irrespective of the cultural traditions, irrespective of how hesitant women might be to make the first move in another format, meaning not on Bumble, right, in a bar, at a restaurant or on another product. And so this just goes to show that women want this product globally around the world, and that just shows our opportunity. And so when you think about the exciting growth we're seeing in the markets I just spoke about, when you apply our specific Bumble playbook of identifying women taking this approach of micro influencers in each micro territory that are really the embodiment of what Bumble stands for, we really go and supply them with the marketing tools that they need to spread the world and create impact. And then that really discretes the super-sized opportunity for word-of-mouth and virality to spread. And we have this remarkable growth story in the sense that we are only 20% performance marketing. The rest of our users come through viral word-of-mouth, and that's in new markets. That's unheard of in our space. The majority of dating products are inherently relying on paid performance to survive. And we are an organic business that just goes to show the power of this brand and the power of of the product.

So I know that international expansion is a huge part of your growth story. You've also expanded your platform to allow members to meet new friends, as you alluded to, BFF, but also to meet business acquaintances. Can you tell us how those ideas came about, just spend a more time there? And where you see those products going in the future?

Yes, of course. So expanding beyond dating was always part of the day 1 vision. I didn't share this on this call, but I was actually really adamantly against doing another dating app coming out of the past several years prior to Bumble. But when I really looked at this passion towards creating a kinder ecosystem, one where women were empowered and control, then you looked at that critical need for the dating world to be completely turned on its head, that's why we started with dating. But that vision of something more has been there from day 1. The gender imbalance was not just in dating, it impacted all relationships. And we needed a solution in those relationships as well. But this is where things got really interesting. So early 2015, 2016, we started seeing a trend. And it was one that we anticipated would happen because we created this really friendly brand. There was no love. There was no heart. It was not romantic. It was friendly. It was casual, it was welcoming. It was women-friendly. So we started seeing just droves of women basically hacking their profile saying, "Hey, I'm married. I just got engaged, moved to a new city with my boyfriend, looking for friends, looking for friends, looking for yoga buddy, looking for Netflix and wine nights, looking for someone to meet up with, really fascinating behavior, so we studied it and we watched it like a hawk. Well, when we saw it kind of tipped that number of what we said, okay, this is real, we went and built a product offering for them. And since then, we have been critically focused on the expansion of dating. And so we have really left that BFF in both Bizz and BFF2 modes in what I would say are still beta modes, very V1. And right now, we are working on the relaunch of this, which we're super excited about or very passionate about the opportunity here because we have over 10% of our active users using BFF in that beta mode. So that just goes to show how much customers want this, how much they need this. And when you think about the LTV opportunity here, it's really exciting, not only that, but the acquisition opportunity. BFF is this on-ramp to bring in the person who might be opposed to online dating or in a relationship right now, but when they go through that breakup, that gets close to on-ramp [indiscernible] in the dating side of the product. And what's fascinating is that when we see a BFF and date customer, meaning someone that uses both of our offerings, they have a higher propensity to pay. They actually pay 30% more than just the dating customer. So this is really a profound business opportunity. And ultimately, Kim, the long-term vision of Bumble is to be there through the woman's entire life cycle. This has been something we said from day 1. There's 3.8 billion women globally and 1.1 billion of those are single women, 1.8 billion arcing women. Women are often the household's primary decision-maker. They are estimated to have over $30 trillion of purchasing power globally. And when you think about Bumble, we believe that we have an opportunity to capture that spend and to drive real impact across their lives in several different ways. And over time, we want to be able to focus not just on dating, business friendship, but health, wellness, and just all this within the Bumble brand. And our brand is built on trust. And that's our biggest moat, right? It's not something we're trying to plug-in after the fact, it's there. It's foundational. It's in our DNA. So this really just allows us to better monetize our customers across our existing dating products, but also to expand more broadly in these other segments.

So you've obviously been an innovator and disruptor in the online dating market, and you talked about the extensibility beyond dating and romance. You've also been an innovator in technology more broadly. So you already talked a bit about introducing video chatting and calling within the platform that was hugely innovative. What has driven your track record of innovation? And how do you come up with ideas within the company?

Yes, I would say it's really simple. It comes down to 2 things. First and foremost, listening to the customer, right? So many businesses ignore the most important trends, and those trends are quite literally being written, if you'll just watch and listen. And we do that. We really put our customer first. We pay attention to what they want. We watch their behavioral trends and we deliver for that customer. Our customer drives our roadmap, right? And that's so important, that's so critical. And as they have struggled with things where they've said, we want access to this or we want access to that, so we built our monetization roadmap. That's how we've built our safety roadmap. And so listening to the customer is critical and it's the foundation. Now the second Northern Star, which is ultimately how we've always led is by our values and by our mission, right? If we want to create safer and more equitable relations -- healthier and safer and more equitable relationships for everyone across the globe, what will drive that, right? When you put those core metrics at everything you do, the roadmap rights itself. So for example, Private Detector, we were seeing women, not just on our platform but across the Internet, struggle with receiving unsolicited nude images. We built this incredible feature to detect bad images at the onset before they even view the image to deter them from opening that. We created photo verification. Photo verification, we were the first in the space as a group to roll out photo verification to actually prove that you were who you said you were. And you were not cat-fishing someone or being cat fish. So we just lean into what the women wants and what the women needs and we listen and we build. And that's always how we've innovated and how we will continue to.

What are some of your users' most favorite features today?

Oh goodness. So I would say, like I just said, a couple of the features we see crazy adoption with and a lot of praise for is photo verification giving women's security and men and all genders, security and knowing who they're connecting with. Private Detector, like I said, to block unsolicited nude images, travel mode has been incredible, especially through the pandemic to connect with others around the world to try and see who in these places that you've always wanted to go to or maybe you do spend time in; and Incognito mode. This is an incredible feature that we built for the women that were telling us, "Hey, we just went through a breakup or we just through a divorce. We really want to use Bumble, but we don't want everyone else to see us." So we've built them this cloak, this invisible mode where they can be on Bumble and they can see everyone, but nobody can see them until they basically tap them on the shoulder virtually and say like, "You can see me." And so these are just a few of our features that, in particular, women love, and this goes to show why Bumble is so special and so unique to the market because we drive with women in mind, and they know that it's authentic because this is a woman-founded business that's built by women, for women, and it's always going to prioritize that safety at the core.

And without getting into too much detail on your future tech or product roadmap, can you tell us thematically where you're focused on, on your product roadmap?

Yes. So I think what's so exciting about our product is that we have this opportunity to be both, we call it digital and the intersection of that. So that's where physical meets digital. And we get to build for both. So how can we build an innovative product roadmap to help you meet people digitally in your area quicker, faster, better? We really fundamentally believe that Bumble is going to be this gateway to actually socializing more generally. So we are building for this femoral opportunity when you go out determining how you go out or where you go out based on who's there. And so Bumble is really going to continue to lean into the innovation for this digital connection, but then also spearhead this physical connection. So we're launching our first coffee shop in SoHo actually in July. And we have all sorts of product opportunities to send matches to our safe coffee shop. So it's driving this extensibility from our app, giving them somewhere to go, giving them an offering of a cup of coffee or some food or some great conversation starters. And this is just the strength of our brand that we can actually go with that user life cycle. We can be with you on that journey, and we fundamentally believe that we have permission to even be with you after you find love, to help you find friends, business connections and even be part of that relationship as it goes forward because people want to wear the Bumble sweater, people want to wear the Bumble hat. And this is a brand that cares and that's not going to go away.

Okay. So this has been amazing, but this is my last question for you. Where do you see Bumble in 5 years? Where do you see Bumble in 10 years?

So I believe that there'll be similar places. In Bumble, let's just start with 10 years. 10 years from now, Bumble will be the preeminent group that caters to every micro community with our core products today, but many to come in the sense that we are going to help create healthy and equitable relationships for everyone. So if you look at Bumble app, this is a phenomenal product to really focus on women. And as we said, the TAM for women is remarkably large, right? 3.8 million women globally, that is a huge opportunity. But when we look to Gen Z, they want something different. And so we have the ability to go cater to that audience. When we look to the LGBTQIA+ community, how can we build innovation for that community. Our mission at large, 10 years from now, will be what it is today. At Bumble Inc., we build healthy and equitable relationships. And we do that by engineering kinder, more accountable and safer technology that can go and lend itself to building and catering to all of these communities globally. So I really fundamentally believe that this is a business that will be here for decades to come. We're all deeply passionate and committed. And 10 years from now, there will be even more Bumble babies and all sorts of relationships that will extend on healthy and equitable footing starting on our product.

Whitney, thank you so much for joining us today. This was amazing. Thank you for sharing your story. Also, most importantly, congratulations on your unbelievable success. With that...

Thank you. It's been so amazing for helping us make it to this point. We're really grateful for you.

Of course, our pleasure always. With that, we conclude day 1 of the Disruptive Technology Symposium. Thank you all for those of us who've joined us today. We look forward to seeing you tomorrow for day 2. Thank you, and thank you again, Whitney.

Thanks, Kim. Thank you, everyone.