Tantan, an American social networking company for women, is worthy of investment?

Many people have heard of Tinder and Tantan, but not necessarily Bumble. Bumble is also an American company that helps strangers make friends. It has a well-known product called Bumble APP, commonly known as female Tantan (or female Tinder). In addition, the company has another product with a large number of users called Badoo, which can be seen as a combination of Momo Nearby People + Tantan, advocating "sincere dating".

So what are the investment points of Bumble? I will briefly sort them out for your reference:

Large number of singles and increased penetration of online dating
Not to mention the emptiness, loneliness and coldness of single people. It is foreseeable that with the popularity of the concept of late marriage and late childbirth, the number of single people who are increasingly unwilling to compromise will increase. This already huge market will surely continue to grow, sweeping across the United States, Europe, China and other regions.

Secondly, the penetration rate of the Internet as a channel for making friends has increased year by year. In the United States, the Internet has become the number one channel for getting to know your significant other.

​
The third is that single people often have money and are willing to pay to find true love. This type of product has mature and stable user payment habits.

The company has two powerful products, Badoo + Bumble, which is called "dual-wheel drive"
In September 2020, data from Sensor Tower showed that Badoo had 28.4 million monthly active users. Together with Bumble's more than 10 million users, the company has a total of 42 million users. Compared with companies that only have a single social product, the company has two products, which is undoubtedly more favored in the capital market. After all, a company that can operate two products well has the opportunity to find or operate a third product, which helps to increase the capital market's imagination of the company.

Female-led social network with differentiated brand positioning makes Bumble stand out

In the field of stranger dating, Tinder is the big brother in terms of single products. Bumble wants to compete with the big brother, and it is impossible to completely copy it. Therefore, Bumble has differentiated itself in products and brands, emphasizing female dominance and protection of women. The company's brand slogan is "Make the first move". After users swipe right on each other's faces to find a match, only women who take the initiative to initiate a chat can start a conversation.

Because it is difficult to make friends and find true love, Tinder alone cannot meet the needs of single people, so Bumble has an opportunity. In addition, on these dating sites, women are the primary productive force, and winning female users means winning the world. Bumble's female-friendly brand will also help it gain popularity among female users, and then attract male users.

Bumble's female-first strategy is undoubtedly successful, with data showing that each man using Bumble can reach 30% more women than other products. Bumble's monthly active users also reached 12.3 million in September 2020, although it is not as high as Tinder's 60 million monthly active users.

The payment scale and per capita payment amount can still be increased

As of September 2020, Bumble had an average of 2.44 million monthly paying users and a monthly paying ARPU of US$18.48. Compared with Match's tens of millions of paying users and relatively higher ARPU, Bumble undoubtedly still has room for growth.

According to Appannie data, Tinder has 60 million monthly active users, which is about twice that of Bumble's two products. From this simple comparison, its payment penetration rate is similar to that of the industry-leading products, but both should still have room for growth, including user scale, payment penetration rate and payment amount.

Good growth and paid ROI model

Only 22% of the company's users come from paid purchases, which means that 78% of the users are tap users. The average payback period is less than three months, which can be said to be very good. After all, finding true love cannot be done in three months.

What is a reasonable valuation?

Looking at the listed companies in the field of stranger dating/marriage and love, Match is the absolute leader in this field, with a current market value of 38.8 billion US dollars. Then there is Momo Group, the listed company of Momo+Tantan, with a market value of 3.2 billion US dollars, and a small company called Meet, with a market value of 460 million US dollars. Bumble's listing undoubtedly adds another listed company to this camp. From the perspective of products, the most comparable company is Match.

Let's simply compare the two companies' indicators such as users, revenue, profit, and market value. If Match is not overvalued, based simply on user valuation and PS valuation, Bumble's market value should be between US$10 billion and US$16 billion.

Note: Data is from App Annie, the active users of the top apps of the two companies in December