By going private, Bumble may finally make a good match

In the language of love, Bumble is in a relationship rut. Fatigued customers, don’t want to pour any more of themselves into the dating app, and neither do investors: Bumble’s revenue is shrinking, and its stock is down by more than 90 per cent since it listed in 2021. Can AI rekindle the romance?

That might explain the interest from suitor Ithaca Holdings. The investment firm founded by executives from Meta Platforms and Instacart on Tuesday said it wanted to take Bumble private for $1.3bn including debt, or a stonking premium of 138 per cent on last Friday’s share price.

There are a few potential ways to brighten Bumble’s prospects. One is to supply users, for a modest extra fee, with AI wingmen — think digital versions of Cyrano de Bergerac. Bumble already has a matchmaking assistant, Bee; Grindr offers a less twee suite of AI solutions called gAI. But that market is already getting crowded, with legion AI dating coaches offering their services for pennies.

The bigger prize would be to use AI to sharpen the app’s matchmaking abilities. Anecdotal evidence from long-suffering users suggests that this is an area that could be vastly improved. Machine learning ought to be well suited to identify exact depth of dimple, tilt of nose, arch of eyebrow or, indeed, personality type, that will hook a specific Bumble customer.

The masters of this trade are TikTok and Instagram, which adjust their feeds in real time and are uncannily good at finding just the right reel to keep their users glued to their phones. Given one of Ithaca’s two co-founders oversaw the development of the AI-powered discovery engine behind Facebook and Instagram — the system that recommends content to users from accounts they do not yet follow — there is at least a chance that the new Bumble could become really quite deft at matching people up.

Should Bumble become better at its job, the prize would be enormous. Roughly 350mn people use dating apps worldwide, according to a recent study, or about a tenth of the adult single population. About 7 per cent of them pay. Nudging even a few percentage points more to part with money would increase the revenue pool dramatically.

There’s always the danger that AI makes dating apps worse, not better, turning an already alienating experience into something even more off-putting. But Ithaca is buying Bumble for six times its forecast 2027 operating profit, or less than half the valuation of Tinder owner Match. All relationships take work, but a relatively low price could make this a marriage of mutual benefit.

gaia.freydefont@ft.com