Ithaca Holdings has announced the acquisition of Bumble in an all-cash deal valued at $1.3 billion. The agreement sets a purchase price of $6.05 per share, representing a 138% premium over the last unaffected closing price. The transaction has already secured shareholder approval through written consent from affiliates of Blackstone and founder Whitney Wolfe Herd, bypassing a public vote.
Following the deal's closure, Ithaca co-founders Ravi Gupta and John Hegeman will assume the roles of co-CEOs. Gupta, a former partner at Sequoia Capital, and Hegeman, the former chief revenue officer at Meta, intend to integrate frontier technology to address declining user engagement. Bumble reported a 16.4% drop in paying users to 3.2 million during the second quarter.
Ithaca Holdings evaluated hundreds of companies over a six-month period to identify businesses that would appreciate in value due to advancements in artificial intelligence. The firm operates under the thesis that human connection becomes more valuable as AI-generated content becomes more abundant. Founder Whitney Wolfe Herd will remain involved with the company under the new leadership structure.
Market reaction to the acquisition was significant, with Bumble shares rising approximately 50% to $3.81 on October 12 following reports of the negotiations. After the official announcement on October 13, the stock climbed an additional 56.58% to close at $5.95. The company was originally launched in 2014 with a focus on female-initiated messaging.
