THE MOTLEY FOOL - Bumble recently agreed to buy Fruitz, a French dating app that lets its users express their intentions with four fruit-based metaphors: cherries, grapes, watermelons, and peaches. On the surface, Bumble's acquisition makes sense. It only operates two main apps, Bumble and Badoo. However, the deal also raises three red flags about Bumble that can't be ignored.
- Bumble needed to buy more growth
Bumble ended Q3 of 2021 with 2.89M paying users across its two main apps, which represented 5% YOY growth. By comparison, Match's paying users rose 16% YOY to 16.3M.
- Fruitz probably won't add many paid users
Fruitz has been downloaded ~5.6M times globally for iOS and Android devices, according to Sensor Tower. And we don't know how many paid users it actually has.
- Selling Badoo makes more sense
Bumble generated more than twice as much average revenue per paying user than Badoo. Instead of acquiring another European-oriented app to offset Badoo's slowdown, it would have arguably made more sense to sell Badoo and reinvest that cash into Bumble's overseas expansion.