Andrey Andreev sells Badoo, Bumble to Blackstone at $3 billion valuation

Andrey Andreev, the Russian-born online dating tycoon, has sold his business MagicLab to Blackstone, one of the world’s leading investment firms. The deal valued the company “at approximately $3 billion,” the firm stated, without providing any more details.

MagicLab touts itself as the company that “invented how people meet in the modern, mobile age,” “connecting and transformed the lives of over 500 million people around the world.” Its brands include Badoo, Bumble, Chappy and Lumen.

Source: Sensor cited by Forbes

In 2017, Andreev turned down two offers for Bumble from Match, at $450 million then $1 billion, according to Forbes. These offers came despite a series of lawsuits opposing Match, another global dating giant, to Bumble.

In October 2018, Andreev said he was weighing a NASDAQ IPO as part of his “plan to become the world’s biggest online dating business,” as reported by Bloomberg.

Tax avoidance, sex and cocaine

This past summer, however, the company’s reputation was tarnished by a Forbes investigation into the work culture at Badoo’s London headquarters. The business magazine noted that, “from the beginning, Andreev rooted Badoo’s corporate structure in numerous offshore entities” – from Cyprus to Malta to the British Virgin Islands – for tax avoidance purposes.

The Forbes journalists also heard about “afterparties with prostitutes and cocaine in all the company’ offices” (of which Andreev was not necessarily aware).

While behavior in these offices was hostile and discriminatory toward women, corporate life also included “internal engineering updates named after porn stars and a widely circulated video of one employee receiving oral sex from a prostitute.”

While denying a part of these allegations, Andreev and MagicLab announced an internal investigation into the London office. 

“The ultimate matchmaker” (Forbes)

Andreev, now a UK citizen, is among the most successful Russian-born tech entrepreneurs. Born in 1974, he started his first business in Russia – an online store that sold computers and computer accessories – at the age of 21. He then founded web-tracking service SpyLog (1999) and ad service Begun (2002). 

Andreev became a millionaire one year later with the acquisition of Begun by Russian financial group Finam, as noted by Forbes

Andreev’s first dating service, Mamba (also known as Wamba), was launched in 2004. This company, which quickly became number one in Russia, now claims more than 40 million users worldwide. Badoo, which Andreev started in 2006, turned even more successful with over 453 million users. 

The Bumble story was a bit different: this Austin, Texas dating app was not created by Andreev, but he injected $10 million in it at the seed stage, in 2014, in exchange for a 79% stake, according to Forbes. 

Topics: Dating & matchmaking, Digital services & Apps, Finance, International, M&A, News, People
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