IPO

Bumble Files For IPO Amid Risk Of Apple’s Privacy Changes

On Friday, dating app Bumble cited new privacy rules like as Apple’s upcoming IDFA changes as significant risk factors in its IPO filing.

Bumble officially filed for its IPO last Friday, and though no official date has yet been given, rumors predict that its initial public offering will take place around Valentine’s Day, 2021. Bumble said in its S-1 filing that it will trade under the ticker symbol BMBL on the Nasdaq. It also confirmed that, as of September 2020, the app had over 42 million users, of which 2.4 million are paying members. 

The Austin-based dating service is known for being the app that allows women to make the first move. Bumble operates its flagship product, Bumble, which launched in 2014, and Badoo, which was introduced in 2006. Now the company is going public, it seems like the app is still a firm favorite for those searching for dates and love online. 

Apple’s new privacy changes 

However, all is not sweet in Bumble land as the company said in its IPO filing that changes like Apple’s (NASDAQ: AAPL) upcoming privacy updates to its Identifier for Advertisers (IDFA) could hurt the dating app’s business. These IDs are used to track users who interact with in-app ads and currently are enabled by default. However, with increased consumer privacy concerns surrounding tracking, Apple announced that restrictions were coming. 

Apple’s new privacy terms involve prompting a user with pop-ups in each app that asks permission to track users, which can either be accepted or declined. Currently, advertisers use this tracking to target ads and measure how effective they are. However, since users are becoming more aware of their privacy rights and are also starting to dislike how much of their private information is tracked for commercial purposes, many individuals are expected to opt-out when given the choice which will dramatically affect digital advertisers.  

Privacy rules pose risks for the tech industry 

Following Apple’s upcoming change for developers, Bumble predicts that just 0-20% of its users will agree to opt-in to sharing the unique ID for targeted advertising. The location-based social application stated that this change will likely result in higher costs per registration for app developers and limited ability for advertisers to target and measure campaigns for specific users. 

Advertising is a big part of Bumble’s business model. Not only does the company earn revenue from selling advertisement space in-app, but it also pays for ads to obtain new singletons. In 2019 alone, the online dating app racked up $130.4 million in advertising expenses. Therefore, Bumble’s reliance on third-party publishers and platforms means that if any of those parties limit or change their marketing techniques in a significant way, it could really affect its business.

Of course, it’s not just Bumble that will be affected by the iPhone maker’s new tracking rules. Tech giants across Silicon Valley are bracing themselves for the impacts of Apple’s privacy and tracking changes. In December, Bank of America noted that Facebook and Snap are most at risk from the changes. Facebook is expected to lose around 3% of its revenue and a 5% headwind for Snap.

A MyWallSt subscription gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team post daily insights, subscriber-only podcasts and the headlines that move the market. Get your free trial now!


MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here