The American investment company Blackstone bought the dating empire of Andrey Andreev, a native of Russia for $3 billion. Only one service of Andreev – Badoo – is well known at home. It’s still the biggest, but it’s not the most important. Real competition with Tinder, the market leader, began a few years ago when the entrepreneur teamed up with his former employee, who left the company because of harassment.
It seems to be the most successful exit in the history of the Russian Internet industry. According to various data, Andreev’s share in MagicLab could be between 75 and 80%. Blackstone valued the entire business at $3 billion. Thus, the entrepreneur had to raise at least $2.2 billion.
Andreev has not been to Russia for more than a decade. He has UK and Malta passports. But the entrepreneur did not renounce his Russian citizenship. He began to build an international dating empire with the proceeds from the sale of Russian projects Begun and Mamba. One of the investors in both these projects and Badoo was the Russian holding Finam. Badoo’s office in London’s Soho district is full of Russians. Andreev values his compatriots for “strong brains.” The Russian market for Badoo is one of the key ones: about 10% of the audience.
What is important to know about the dating empire of Andrey Andreev
In Russia, only one MagicLab service is very popular: Badoo. Only Mamba, which Andreyev also founded, is more popular here. Badoo is one of the main players in the world. But MagicLab has other assets too.
- According to the company’s own data, since 2006 the Badoo application has been downloaded more than 420 million times by users from 190 countries. Badoo dominates in South America, Eastern and Southern Europe, Turkey and a number of African countries, and in Southeast Asia.
- MagicLab also includes Bumble (a unique feature of the service is that only a woman can initiate a conversation), dating service for homosexual men Chappy and dating service for people older than 50 Lumen (calls himself the most popular in its niche).
- Bumble is Andreev’s great business fortune. According to SenseTower, this application is already ahead of Badoo in revenue, although its audience is much smaller: about 50 million active users. Only the pioneer of the market, Tinder, earns more. The idea of Bumble belongs to former Tinder employee Whitney Wolfe Heard. In 2014, she left this dating service, accusing former boss and at the same time her boyfriend in harassment. Andreev contacted Whitney when the scandal was in full swing and offered an investment. Whitney agreed. The founder of Badoo paid $ 10 million for a share of 20%. The service began to earn (on built-in purchases) in 2016. In 2017, his annual revenue reached $ 100 million. Match Group, which owns Tinder, tried to buy a competitor for $ 1 billion – Andreev and Wolf Heard refused.
- In autumn 2018, Andreev announced plans to bring the company to IPO. “We take the IPO very seriously: I believe that the business looks quite stable, the eggs are slowly starting to be laid out in all baskets, there are already a lot of baskets,” he said in a big interview with Russian Forbes in May 2019. A month later, American Forbes also dedicated Andreev’s material – titled “Sex, drugs, misogyny and debauchery at Badoo headquarters”. At least 13 former employees called the atmosphere in the London office of the company “toxic – especially for women.” One of Forbes’s interlocutors talked about crazy parties: “everyone was sniffing cocaine naked, and then it all appeared in the internal mailing list.” Former Badoo chief marketer Jessica Powell complained that she was advised to look sexy at important meetings, and once was asked to massage one of the candidates. “Do not agree with Andrey? You were called a bitch, ”Powell recalled. Andreev confirmed some of the facts and refuted some. According to him, the company has always struggled with harassment.
“I am absolutely talking about the product. My work in this company is an inspiration manager, I call myself that. I walk around the office, inspire people, we come up with something together. I am a person with a good scent: I smell and pass them on to people, ” Andreev told about his role in the company.
After the departure of Andreev, MagicLab will be headed by Wolfe Herd.
- According to sources, no fundamental changes to the service are expected. In a press release distributed by Blackstone, the parties to the transaction predicted MagicLab is booming due to new investments.
- The dating industry is still growing. But market researchers warn that its growth is slowing down: if in 2018 the user base, according to the eMarketer company, increased by 6.5%, then in 2019 it will add only 5.3%. At the same time, new major players enter the market – social networks. Own dating services have already launched Facebook and VKontakte.
- Andreev is preparing to launch a new project. Which is unknown.
“I’m going to return to what I like to do most: create, run and scale big ideas. My next project is still a secret, but know that great news lies ahead, ”Andreev said in a press statement.
The entrepreneur did not answer clarifying questions from Revyuh team.