Blackstone eyes dating apps, other recession-resistant assets after MagicLab deal

Blackstone Group — after its investment in MagicLab (an owner of dating app Bumble)—sees opportunity in other online marketplaces, according to Jon Korngold, senior managing director and head of the firm’s growth equity team.

Last week, Blackstone announced it is taking a control position in MagicLab, a parent company for the women-centered dating platform Bumble and global dating site Badoo. The deal valued MagicLab at nearly $3 billion. As part of the deal, MagicLab’s CEO and founder Andrey Andreev will be selling his stake and stepping down from his role, according to the announcement.

Bumble, headquartered in Austin, Texas, is the only dating app where women initiate conversations with their matches. Whitney Wolfe Herd, who co-founded rival dating app Tinder in 2012, left to create Bumble the following year. Under Blackstone’s ownership, Wolfe Herd will continue to lead Bumble as a CEO.

Blackstone plans to expand Bumble’s geographical footprint, its digital user experience and accelerate growth of its beyond-dating initiatives. These include options like Bumble BFFs and Bumble Bizz, online platforms for users searching for friendships and business connections, Korngold told Buyouts in an interview.

Blackstone viewed online dating as one of its core thematic priorities for some time, Korngold said. The firm met with key players in the industry before selecting MagicLab, he said.

Investment in the business of online dating fits a broader theme of backing recession-resistant and profitable online marketplaces that serve growing consumer demand. “People date through recession, people date through bull markets as well. Nearly 40 percent of relationships that started last year started online. You’re really starting to see acceleration in this marketplace,” Korngold said.

Blackstone also likes female-led, female-empowered businesses, Korngold said. “Bumble has purity to its message, it’s a safe haven for women to take control of their dating life,” he said.

Several Blackstone funds invested in the deal, which was sourced by multiple partners, according to a source familiar with the firm.

“It’s a multi-billion commitment across Blackstone. No growth-focused PE firm could do the deal of this size whatsoever,” Korngold said.

Blackstone’s growth equity unit is continuing to grow and has over 20 people on staff, Korngold said. Most recent hires include Brian Dunlap, previously head of technology investing at TPG Rise Fund, and Ram Jagannath, formerly of Carlyle Group and Navab Capital Partners. The team is looking to extend two more offers in a very near term, Korngold said.

The growth team is expected to raise a dedicated fund, though it’s not clear how much it will target, the source said.

In September, Korngold, who was a keynote speaker at the PartnerConnect West conference in San Francisco, shared that the team has hired executives from TCV, Vista Equity Partners, NEA, Andreeseen Horowitz, TPG Growth, and General Atlantic.

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