Ithaca Holdings acquires Bumble: Ravi Gupta and John Hegeman take the dating app private

Speaker 2: Fantastic. Cheers, Neil. Goodbye.

Speaker 1: Thank you.

Speaker 2: Our next guests are already in the waiting room. Have Ravi Gupta and John Hegeman from Ithaca Holdings, the co founders, co CEOs here to discuss the landmark deal Boom. From HomeView. Welcome to the show, guys. Thank you so much for coming on and such a big day.

Speaker 1: Look at us. You put a smile on our face. It's great to

Speaker 16: see good to see you guys. But but wait, sorry. Before we get started, why are guys so bundled up?

Speaker 1: It's in LA. It's the coldest it's been

Speaker 2: am in... Dressed as the as the gumshoe journalist from the Social Reckoning. There's a Wall Street Journal reporter. He wears this exactly. And we were doing a movie review earlier. I just...

Speaker 16: And Jordan, you're just cold because it's 70.

Speaker 1: It's freezing. It's freezing. It's it's It's nice It feels like the tundra.

Speaker 2: It's only seventy two days till Christmas, so, you know, you got to warm up inside. If a Yule tide is here, then we want to warm our hands by the hearth. But things are heating up in the world of deal making. You are buying Bumble. Take us through

Speaker 11: it.

Speaker 16: Let's go. Yeah. We signed it. We signed it. We announced it this morning. So we're pumped. Are partnering with Whitney Wolfherrd, who's the founder of Bumble. Yeah. And we are taking it private. It's the first thing that we're doing as Ithaca and John and I are pretty pumped.

Speaker 2: Yeah. Take us through the thesis because, I mean, we talked about the the the idea for Ithaca, the structure Yeah. And there's so many different ways this fund could have gone. There's so many different activities. The different funds and different teams are working on different opportunities. Why is Bumble the right move right now?

Speaker 16: Yeah. Well, listen, the first thing is I'm going tell you, so we're not a fund. We're a technology company.

Speaker 2: Yeah. Yeah.

Speaker 16: You know? So, you know, so the first thing is what we're looking for is companies that matter, right, and companies that are going to matter even in an increasingly AI, you know, abundant world. Yeah. Right? And so when you think about that, it's actually pretty hard, right, because what consumer value propositions are going to endure? Yeah. But when you think about human connection and you think about meaningful relationships, you think about bringing people closer to love, we think that's only going get more important. Yeah. And so in all the companies we've looked at in the last six or seven months, Bumble was crazy unique. Yeah. And the thing that's pretty cool about it is Whitney saw that twelve years ago. And so this starts with her. Yeah. I mean, she founded this company, she started a movement, you know. Millions of people have better lives, right? Have found their spouses, have, you know, had children and because of Bumble. And so when we think about important missions, you know, John and I had the best jobs in the world before we started this. I came on TBPN that day, if you guys remember,

Speaker 3: you know.

Speaker 7: That's huge.

Speaker 16: And like, you got to work on something that's a worthy journey and there's nothing more worthy than Bumble. And then, I think, John, you should talk about it, but we think that we can actually really help and really make the product even better than it is now.

Speaker 2: Yeah. I want to hear about that.

Speaker 13: Oh, yeah. So AI is not going to replace human relationships, but we do think it can play an important role in just making the product a lot better and helping people connect with other people, not just that they're going to swipe right on, but that they're going to have a great conversation with, that they're going go on a great date with and hopefully form a lasting, meaningful relationship. Just really excited about the opportunity to work on an important problem and one where we think we can do a lot to help people.

Speaker 2: Yes. I feel like one of the main benefits that's always touted about a take private of a public company is that you have an opportunity to actually rethink the business model basically from first principles as long as you have the cash on the balance sheet. And I feel like there's a lot of different monetization paths that have been tried. And And you could imagine everything from the product's free the whole time. It's just ad supported, obviously, of experience there to what would people pay to actually find the one? Like people pay, what are they called, matchmakers, like $20,000...

Speaker 16: What would you have paid to find Jordan?

Speaker 2: I want

Speaker 1: to know that. I want to know. What what would you have paid for this? It is like a... It is it is is a...

Speaker 2: Where to find a real spouse is is incredibly valuable. And and so there there's this wide gamut of business models. But then there's also just, hey, maybe it's time to bring in some new operational talent and keep the business model the same and just be more operationally efficient. What are you thinking that might change? What's going to stay the same? What are you excited about?

Speaker 13: Yeah. I think the number one priority is just on making the product create more value for people and getting Sure. More people to use I don't think we're at all worried about ability to kind of grow revenue and monetize better over time if you can do that. I think there will be plenty of good opportunities. But, yeah, it's such an important problem to people where if you have the best possible version of the product, that is priceless and so think there will be great ways to monetize that over time.

Speaker 16: Yeah, the other thing it's so funny. This isn't going be a reference. I don't think it's made very often on TBPN, but I was watching the Post this weekend with our family, with my wife and our boys and there's a line where Catherine Graham is writing it down and it's like, you know, profits follow quality. Yeah. Listen, like, you have to actually help people find amazing dates. You got to have them find amazing relationships and like, the monetization will come. And one of my favorite things about John is like, John was responsible for $200,000,000,000 of revenue at Meta, right? I don't know. I don't know if we're going hit the Gong, but that feels like it could get the Gong. It may... We hope. But like,

Speaker 3: only thing

Speaker 16: that gets you that... What did you say?

Speaker 1: We'll get to the gong, so... Okay. Good. Please. We appreciate it.

Speaker 16: I think the the only thing that gets you that is if you actually provide value for people, right? And so ultimately for us, like, the monetization will come, but what you actually have to do is be great at getting people great dates, getting them matches that they wouldn't have gotten and getting them matches that are the best matches that they could ever get.

Speaker 2: So what's the low hanging fruit on the product side? Do you need to, like, kill off more bots or bring new people in with top of funnel advertising? Like, where... How do you make the product actually better?

Speaker 13: Yeah. I I think those are some of the themes. I think we can do more to improve the matching algorithm so that it's showing new matches that you're not just going to swipe on but that will lead to great conversations, great I is, I think, more work to be done to make sure that all of the profiles you're seeing are high quality. I think there's been some good work on that already. Yeah. Then I think there is room to kind of integrate AI in kind of more ways over time too that will, I think, facilitate that whole process and just make it work better for people.

Speaker 16: Yeah. I think on that, guys, one of the things that think Whitney started it with the quality reset, right? This idea of like, we are going to make sure that we have only the best profiles, only real profiles on Bumble. Like, that's a hard decision that's courageous and she did it as a public company CEO, which is baller. Then the other thing I would tell you that I get some inspiration from is like, listen, I see Instagram ads and I think they're magic. Can't imagine how they understood what I wanted, right? That was Sean and his team when he was there. And I think that what you hopefully want people to feel is that same kind of magic, but even more important, right? Because it's on a much more important problem, right, that they get to feel because of the matching algorithms and because of some of the work that we hope we can do in the product.

Speaker 1: How have you guys thought about developing your own internal thesis around AI winners versus losers? Because over the last year, we've just seen in the public markets, it's extremely violent, right? Like, general investors, like you sort of bubble up. There's more of sort of like broad ideas like SaaS is dead and maybe you want network effects. But then there's also like looking at all these, you know, subcategories. The... In the public markets, like, even if you don't think a company's an AI loser, other people might, and then you probably should should at least get out of it. Whereas you guys can take a longer term view and and actually apply more rigor and I think that's an advantage. But like, how much of that... Like, you've you've looked at hundreds of companies since since starting Ithaca and so like, what are your sort of like updated models there?

Speaker 16: So the best part for us is concentration actually is extraordinarily helpful. Right? Look, we're not trying to build a portfolio. We're going to go... We we have signed an agreement to buy Bumble. We're going to go operate it. John and I are going be the co CEOs. So there is a real look into each other, the whites of each other's eyes of like, do you really want to go do this That for a long actually is extraordinarily helpful because on a lot of companies, it's not that we're like, oh, we know that this is going to break this way. It's honestly that we don't know. It's uncertain, right? But if it's uncertain, that's good enough for us of like, Well, we're not going to go do that, right? We better be... If it's not a hell yes, it's a hell no, right, for

Speaker 14: us.

Speaker 16: Yeah. And so, that really helps. I think the other thing is one of my favorite things about working with John is like, despite being so smart, there's just a lot of humility. So, a lot of times I'll ask him like, hey, what do you think is going to happen here? I mean, just kind of like, I don't really know. I don't really know how to think about the way that's going go. I think that's kind of missing from a lot of people's perspectives in the markets right now because they're sort of trying to take a strong point of view. The reality is, on a lot of businesses, nobody knows. The reason that we think Bumble is unique is we do fundamentally believe, and we believe this with all of our hearts, that like humans want relationships with humans. Right? And they're going to want relationships with humans, and those relationships are going to be even more important in the future. And what we hope is that this is pretty obvious in retrospect as AI has advanced the way it has.

Speaker 1: So I on the betting exclusively on the why and being okay with not knowing exactly the how. Right? Is that like another way to put it? Because like there are software companies where like their why is the how. It's like we create like a database and then we sell that to companies. Yeah. This is like a very... And and and with this, it's like if human connect... The company exists to drive human connection. But how exactly you do that, whether it's like opening up, you know, digital twins or agents or what whatever whatever it might be or just better matching algorithms, like that feels like like all of that can be figured out in time. But knowing that like the the end goal of the company will never change is like something that you feel like you can lean on and like bet the next chapter of your career on.

Speaker 16: Is that... Yeah. Yeah. I mean, honestly, I'll be... I'll I'll I will do this for John rather than him having to do it himself. I think we are more confident in the how. Right? And I think specifically, maybe I would tell you, I think that... Listen, like, you know, I sort of think like, John, like, couldn't you... Couldn't we fix this? What about this product? What about this product? I think this one has a pretty good overlap with stuff that I think John has done in the past. And so I think we do believe that the matching algorithms and maybe just like the way that you actually go and show people people they might really like, I think we can do that really well. We really believe that we can do that. And I would say like that's very difficult, you know, to do, but we think we're uniquely suited to do it. I think the thing that is more of a question mark that we think will follow the why is the monetization, which is like we will figure out how to make sure that people feel like they're paying for something that's fair. But the most important thing is that you actually deliver the value and I would tell you that we have real confidence that we can deliver this value in this sector and that people are going to want this value for a long time. You know, so I agree on the monetization side, but on the product side, you know, we feel confident. I'm using we liberally because of my co founder here, John.

Speaker 2: Well, congratulations. Thank you so much for...

Speaker 1: You guys are a fantastic fantastic duo and and yeah, I can tell that there's so many things like with with John and I where I was just like, yeah, I never would have been able to to do this if we didn't have what what John is is so so capable at. Yeah. So...

Speaker 2: You guys... Just so fun that this happened in consumer like, I I don't... I think everyone is like, oh, they're gonna buy some database thing or something....

Speaker 16: Said that and I think that's the thing for us. This is actually... It's gotta be fun. Yeah. If you wanna get the best people in the world, it's gotta be fun. Totally.

Speaker 2: And this

Speaker 16: one's gonna be fun. So we appreciate it and we appreciate you guys. Yeah.

Speaker 2: Thank you.

Speaker 1: Yeah. Awesome.

Speaker 2: Have a great rest of your day. Cheers. Bye. Let me tell you about public.com. Invest across all asset classes. Automate anything with AI agents, run trading strategies, risk management, money movements, and monitor markets with AI agents on public. Our next guest is with us in the waiting room. We have Jack Goldburg from Yes Chef Group, the cofounder and creator. We're very excited to have Jack. How are doing?