Andrey Andreev Sells His Stake in Parent Company of Bumble and Badoo

Magic Lab
  • Monday, November 18 2019 @ 10:39 am
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Blackstone Acquires Majority Stake in MagicLab
Blackstone Acquires Majority Stake in MagicLab

Russian billionaire Andrey Andreev is ending his relationship with MagicLab, the company that owns Bumble, Badoo, Chappy and Lumen. Andreev is set to sell his majority stake in MagicLab to Blackstone in a deal that values the company at $3 billion. As part of the transaction, Andreev will step away from the business and Bumble founder Whitney Wolfe Herd will take over as CEO.

In a prepared statement, Andreev said:

Blackstone presented MagicLab with a great opportunity to further develop the brands and platform, and I am confident Blackstone will take MagicLab to the next level in terms of growth and expansion. I am incredibly proud of the company, and of how we have connected millions of people around the world. At MagicLab, I have had the pleasure of working with some of the best and most talented entrepreneurs. My aim now is to ensure a smooth and successful transition before I embark on a new business venture in search of innovative leaders with new and exciting ideas. I am grateful for all the support of my partners and employees over the years as we couldn’t have gotten to this point without them. I wish MagicLab and Blackstone every success.

Andreev launched MagicLab earlier this year. The company has annual revenue growth of around 40% and is considered a likely candidate for an eventual initial public offering, but despite its rapid success, it has not been exempt from scandal. A Forbes expose published in July investigated the culture at Badoo’s London headquarters, which employees described as toxic and misogynistic. In response to the article, Wolfe Herd released a statement saying that her personal experience with Badoo was “nothing but positive and respectful” and Andreev opened an independent investigation into the work environment at the London office.

The Forbes expose reportedly has nothing to do with Andreev’s decision to sell his stake in MagicLab, and it does not appear to have dulled Blackstone’s enthusiasm for acquiring it.

“We’re excited to invest in MagicLab, which is a pioneer in the fast-growing online dating industry,” said Jon Korngold, Head of Blackstone Growth, in a statement. “They have a highly talented team and strong set of platforms, including Bumble, which was built on a commitment to inclusion and female empowerment. This partnership is a perfect example of Blackstone’s ability to use its scale, long-term investment horizon, and deep bench of operational resources to help entrepreneurs take advantage of transformational growth opportunities in order to create global industry leaders over time.”

Wolfe Herd added: “This transaction is an incredibly important and exciting moment for Bumble and the MagicLab group of brands and team members. Blackstone is world-class at maximizing the success of entrepreneur-led companies, which presents a tremendous opportunity. We are very excited to build the next chapter with them. I am honored to take on the role of CEO of the group. I will strive to lead the group with a continued values-based and mission-first focus, the same one that has been core to Bumble since I founded the company five years ago. We will keep working towards our goal of recalibrating gender norms and empowering people to connect globally, and now at a much faster pace with our new partner.”

Blackstone will be looking to make the most of its investment by focusing on growing Bumble’s already-considerable success. Going forward, Blackstone plans to bring Bumble to new geographical regions and to continue exploring its possibilities as a platform for facilitating social connections that are not related to dating. MagicLab is part of a larger plan to invest in companies with robust growth profiles in hopes of bringing Blackstone’s $554 billion in assets to $1 trillion by 2026.