Bumble’s IPO introduces Wolfe Herd as a rare club of homemade female billionaires.
A company that caters to women and is led by women, its 31-year-old female founder has become a billionaire.
Shares of Bumble Inc., the owner of the dating app where women take the first step, rose 67% in its trading debut at 13:03 in New York to $ 72, and CEO Whitney Wolfe Herd’s interest valued at $ 1.5 billion.
The list contains a saga that is inspiration and a warning to female technology founders. Wolfe Herd capitalized on an underserved market and built a million-dollar company that, in a sense, was born out of one of the worst barriers for female entrepreneurs: sexual harassment.
“Hopefully this will not be a rare headline,” Wolfe Herd said in an interview with Bloomberg Television on Thursday, referring to the uniqueness of Bumble’s women-led management. “Hopefully that will be the norm. It’s the right thing to do, it’s a priority for us and it should be a priority for everyone.”
Bumble’s IPO introduces Wolfe Herd as a rare club of homemade female billionaires. While women make up about half of the world’s population, self-employed women – mostly from Asia – make up less than 5% of the world’s 500 biggest fortunes, according to the Bloomberg billionaires index. Homemade men make up almost two-thirds of the wealth index.
Of the 559 companies known in the U.S. over the past twelve months, only two, apart from Bumble, were founded by women. It’s the same with blank check businesses, Wall Street’s favorite vehicle that is currently rich. Women-sponsored SPACs accounted for less than a dozen, a fraction of the 349 listed in the past year.
This means that women are largely lagging behind in probably the fastest rise to prosperity in history. Last year, the 500 richest people in the world earned $ 1.8 billion, but according to the Bloomberg Index, 91% of the windfall went to men.
“It’s a big win,” said Allyson Kapin, general partner of investment firm W Fund and founder of the Women Who Tech network. “Whitney saw an opportunity that was not addressed to women, and based on her expertise, she made the gold mine, not only for her and her team, but also for her investors.”
Among the many obstacles for women and other under-represented groups in the start-up world, including coloreds, harassment is one of the most pervasive. A Women Who Tech survey last year found that 44% of founders surveyed reported experiencing harassment, while more than a third of the group experienced sexual harassment.
It was actually harassment that spurred the creation of Bumble. Wolfe Herd founded the company in Austin, Texas in 2014 after her departure from Tinder, the competitive dating app she helped found. The split was severe, marked by a sexual harassment lawsuit filed by Wolfe Herd against the company, alleging, among other things, that she was repeatedly called derogatory names by executives and stripped of her co-founding role as a ‘girl’. titled ” the company looks like a joke. ‘The suit was later settled.
Formative experience
The experience was formative. She initially wanted to create a female social network for women to send compliments to each other, but eventually focused on advice from Russian technology billionaire Andrey Andreev, the founder of the dating app Badoo.
With the support of Andreev, Wolfe created Herd Bumble as a service ‘by women, for women’, which sees it as a place where women are empowered and harassment is strictly scrutinized. It has become the second most popular dating app in the United States using ads with taglines such as: “Be the CEO your parents always wanted you to marry.”
Wolfe Herd took over from Andreev when Blackstone Group Inc. last year bought a majority stake in Bumble’s owner. As part of the deal, Wolfe Herd received approximately $ 125 million in cash and a $ 119 million loan, which she has since repaid in full.
“I felt very comfortable handing over the baton to Whitney,” Andreev said in an email. “She has proven to be very informative and innovative in the dating space.”
Important obstacle
Wolfe Herd’s partnership with Andreev helped her overcome a major obstacle to women-led, women-focused businesses: finance. Less than 3% of venture capital dollars go to startups founded by women, according to data from Pitchbook, a figure that has barely emerged over the past decade.
The tendency of venture capitalists to fund what they know and who is in their network maintains the gap. And this despite evidence to the effect that women-run businesses actually deliver better returns than men-run businesses. Studies by the Kauffman Foundation, MassChallenge and BCG found that companies founded by women generated more revenue and were significantly more capital efficient.
“It’s not about charity, but about making a lot of money,” said Women Who Tech’s Kapin.
Another high profile on the horizon is that of Honest Co., a baby and beauty products company founded with actress Jessica Alba, which she says is preparing to go public.
Women in the start-up world are optimistic about a rising tide. “Whitney’s success will help the case invest in businesses that serve a female audience or are founded by women,” said Austin venture capitalist Kelsi Kamin. “It’s a very exciting time.”
(Except for the headline, this story was not processed by NDTV staff and is published from a syndicated feed.)