Delta Variant Weighs on Match, Bumble

Dating Apps’ Dilemma

Match (MTCH) and Bumble’s (BMBL) stocks have been under pressure in recent weeks as the fast-spreading Delta variant of COVID-19 threatens to hurt dating again. Both dating app companies warned about these trends when reporting second-quarter earnings. Match’s targets for the third quarter are shy of Wall Street’s forecast, while Bumble said a lot of its app users are in areas getting hit hard by the recent surge of COVID-19 infections. This has weighed on the stock prices of both companies.

Shares of Match are down about 7% year-to-date while Bumble, which went public in February and soared 63% on its debut, is 32% lower since then. However, some investors are optimistic about the long-term outlook for these companies.

Reasons for Optimism

Take both Match and Bumble’s guidance for the full year. While the companies sounded a note of caution in the current third quarter, they left their full-year guidance intact, which means they expect to end the year in strong positions. Then there are the company’s valuations. Match and Bumble are trading at about 11 times forward sales. While that is not a firesale, it is lower than their multiples earlier in 2021.

Driving a lot of the growth at Match, which posted year-over-year revenue growth of 27% in the second quarter, is Hinge, its emerging dating app. Hinge’s revenue increased 150% in the second quarter, and it is expected to have revenue of $200 million this year.

Bumble’s Secret Weapon

Bumble has a secret weapon too. In addition to its main dating app in which women have to make the first move, it has features focused on users making non-romantic connections. Women spend 24% more time on its app than men—a trend which might partially be driven by these ancillary features. Studies show that women are more willing to pay for dating apps than men, which is good news for Bumble investors. When reporting quarterly earnings, Bumble said its average revenue per paying user increased among women at double the rate of men.

Match and Bumble stocks may be taking a beating in recent weeks as the Delta variant spreads throughout the country, but their long-term prospects seem promising, and investors shouldn’t give up on love just yet.

Why Credit Card Debt Is So Hard to Pay Off

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UK Electric Vehicle Charging Startup Inks SPAC Deal

EO Charging Valued at $675 Million

EO Charging, a UK electric vehicle charging company, is going public via a SPAC deal with First Reserve Sustainable Growth (FRSG). EO Charging provides the power to Amazon’s (AMZN) UK EV delivery fleet. The deal, which values EO at $675 million, will net it over $150 million in cash.

EO Charging, which started in 2014, has about 50,000 chargers located in 35 countries across the world. In addition to Amazon, it counts Tesco (TSCDY) and Uber Technologies (UBER) as customers. The company is going after the commercial EV market, offering customers a full suite of services including hardware installation, software, and maintenance services. It has roughly 130 employees and was EBITDA positive in 2020.

EO Looks to Expand

EO’s main European markets currently include the UK, Ireland, and Norway, but it has plans to expand further in Europe. Its contract with Amazon spans several European countries including Germany and Spain.

The company and its investors are banking on a big push by governments, politicians, and business leaders for the electrification of vehicles to fuel strong growth. Last week, President Biden called for half of all vehicles made in the US by 2030 to be electric. Other countries have ambitious adoption-rate goals as well. Once EO saturates the European market with its chargers, it plans to expand in the US and other overseas markets.EV SPAC Deals Abound

EO’s merger deal with First Reserve is slated to close during the fourth quarter, with the company trading on the Nasdaq under the ticker “EOC.” It is among a growing list of EV startups to ink deals with SPACs. Other EV companies to ink SPAC deals include ChargePoint (CHPT), which announced a SPAC deal last fall at a valuation of $2.4 billion, and EVgo (EVGO), which inked a SPAC deal in January which valued it at $2.6 billion.

SPACs are still trending, with deals happening at a steady pace. Green companies, especially EV- focused ones, are getting a lot of attention. It will be interesting to see which one will be next to go public via a SPAC.

Friday Fundings: Fanatics, Trendyol, Reddit

Sports Merchandise Startup Raises $325 Million

Fanatics, a sports merchandise startup, raised $325 million in venture funding, giving it a valuation of $18 billion. New investors in the startup include rapper Jay-Z and his entertainment company Roc Nation. Existing investors like Major League Baseball and PE firm Silver Lake also participated in the round.

Fanatics made a name for itself selling sports clothing and memorabilia over the internet. It also operates a handful of physical stores. The company is trying to expand its business, recently launching nonfungible token company Candy Digital. Fanatics is using the money from the fundraising round to morph into a digital-platform operator. It is offering a variety of services including sports betting and ticketing.

Turkish Ecommerce Startup Completes Massive Fundraising Round

Turkey-based ecommerce company Trendyol raised $1.5 billion in a huge venture-funding round, giving the startup a valuation of $16.5 billion. It is Turkey’s first decacorn, or startup with a valuation of more than $10 billion. The round was co-led by a handful of investors including General Atlantic, Princeville Capital, as well as ADQ and Qatar Investment Authority, two sovereign wealth funds. A few months ago, Trendyol raised $350 million at a valuation of $9.4 billion.

Trendyol is the leading ecommerce player in Turkey with over 30 million shoppers. It melds ecommerce with grocery and food delivery, delivering a million packages per day. Proceeds from the capital raise will go to expand in Turkey and internationally.

Reddit Raises $410 Million

Message-board operator Reddit raised $410 million in venture funding, propelling its valuation to over $10 billion. The funding round is still open and is expected to swell to $700 million. Reddit is using the funding to improve the site navigation for users and to grow internationally. Reddit is eyeing an initial public offering in the future but has not set a timeframe. Earlier in 2021 Reddit raised $250 million in venture funding at a valuation of $6 billion.

Reddit’s advertising revenue of $100 million in the second quarter is up 192% year-over-year. It has about 52 million daily users and over 100,000 active “sub-reddits.” It is also in growth mode, aiming to double its employee headcount by the end of the year.