Bumble founder, Whitney Wolfe Herd becomes youngest female billionaire
Bumble, a social application that is woman-centric has led to its founder, Whitney Wolfe Herd to be declared a billionaire. Wolfe Herd is an American entrepreneur and founder and CEO of Bumble which was launched in 2014.
Shares of Bumble Inc. surged 67% in its trading debut to $72 in New York, valuing Chief Executive Officer Whitney Wolfe Herd’s stake at $1.5 billion.
The listing betters a tale that’s both an inspiring and alerting narrative for women tech founders. Wolfe Herd capitalized on an unattended and underserved market and created a multibillion-dollar company that was in some sense born from one of the most antagonizing hurdles for women entrepreneurs: sexual harassment.
“Hopefully this will not be a rare headline,” Wolfe Herd said on Thursday 11th February in an interview with Bloomberg Television, about Bumble’s remarkable women-led management. “Hopefully this 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 else.”
Bumble’s IPO launches Wolfe Herd into an exclusive league of self-made and independent female billionaires. While women make up about half of the global population, self-made women (mainly from Asia) hold less than 5% of the world’s 500 biggest fortunes, according to the Bloomberg Billionaires Index. Self-made men occupy almost two-thirds of the wealth index.
There have been 559 companies that have gone public in the U.S. over the past 12 months and just two, apart from Bumble, were founded by women. This can also be seen with blank-check firms, Wall Street’s preferred wealth-boosting vehicle currently. Women-sponsored SPACs summed up to be lesser than a dozen, a fraction of the 349 that listed in the past year.
This means that women are largely being left behind in what’s likely the fastest wealth-creation boom in history. Last year the world’s 500 richest people gained $1.8 trillion, yet 91% of that bonanza was sent to men, according to the Bloomberg index.
“This is a huge win,” commented Allyson Kapin, general partner at investment firm W Fund and founder of the Women Who Tech network. “Whitney saw an opportunity that wasn’t being addressed for women and based on her expertise she’s made it into this gold mine, not just for her and her team but also her investors.”
Among the numerous obstructions and barriers to women and other underrepresented groups in the startup world, including people of colour, harassment is one of the most common. A Women Who Tech survey last year found that 44% of female founders polled reported they’d experienced harassment on the job, with more than a third of that group facing sexual harassment.
Harassment propelled the creation of Bumble. Wolfe Herd founded the Austin, Texas-based company in 2014 post her departure from Tinder, the rival dating app she assisted in founding. The split was bitter, highlighted by a sexual harassment lawsuit Wolfe Herd filed against the company, claiming among other things that she was repeatedly called demeaning names by executives and her co-founder title waken removed since having a “girl” with that title “makes the company seem like a joke.” The suit was settled later.
Wolfe Herd began with an idea to create a female-only social network for women to send each other compliments but landed up focusing on match-making based on the advice of Russian tech billionaire Andrey Andreev, the founder of dating app Badoo.
With Andreev’s support, Wolfe Herd founded Bumble as a service “by women, for women,” promoting it as a place where women were empowered and harassment was vehemently kept in check. It’s has gone onto growing into the second-most popular dating app in the U.S. with the assistance of advertisements carrying tag lines such as: “Be the CEO your parents always wanted you to marry.”
Wolfe Herd took over from Andreev when Blackstone Group Inc. bought a majority stake in Bumble’s owner at a valuation of about $3 billion last year. As part of the deal, Wolfe Herd received about $125 million in cash and a $119 million loan that she’s repaid in full.
“I felt very comfortable handing the baton to Whitney,” Andreev said in an email. “She has proved to be very insightful and innovative in the dating space.”
Wolfe Herd’s partnership with Andreev helped her overcome a key obstacle of funding to women-led, women-focused startups. Less than 3% of venture capital dollars go to startups founded by women, according to Pitchbook data, a figure that’s barely moved over the past decade.
Venture capitalists tend to fund what they know and who’s in their network which creates the gap. Evidence shows that women-led startups actually produce better returns than those founded by men. Studies by the Kauffman Foundation, MassChallenge and BCG found that female-founded companies generated more revenue and were notably more capital efficient.
“This isn’t about charity, it’s about making a ton of money,” said Women Who Tech’s Kapin.
Another high-profile listing on the horizon is that of the Honest Co., a baby and beauty products company co-founded by actress Jessica Alba that’s apparently preparing to go public.
Women in the startup world are optimistic about a new horizon. “Whitney’s success will help further the case for investing in businesses that serve a female audience or that are founded by women,” said Austin venture capitalist Kelsi Kamin. “It’s a super exciting time.”