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© Provided by The Motley Fool Why Is Dating App Bumble Opening a Restaurant?
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With restaurants and bars reopened, dating doesn't have to be done just virtually anymore. You can actually meet a real person face-to-face again.

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Expecting such venues to be the preferred option, female-oriented dating app Bumble(NASDAQ: BMBL) is opening its own restaurant to facilitate meetups. Bumble Brew will offer 'the convenience of a casual all-day cafe by day with the ambiance of an intimate restaurant and wine bar at night.' It will open its doors in New York City on July 24.

Investors, though, might wonder: What's a dating app doing running a restaurant?

© Getty Images Couple drinking coffee at restaurant

Creating unique experiences

There's a certain sense to the project. Because Bumble is a female-focused brand where it's up to women to make contact first with a potential partner, a branded cafe could offer women a greater sense of security and safety in meeting with someone new.

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Bumble has some experience with this sort of thing. A few years ago it launched Bumble Hive, a series of pop-up spaces in cities like New York, London, and Los Angeles where guests received complimentary entertainment, drinks, and snacks while participating in a live seminar.

Bumble Brew was originally supposed to open in 2019 and offer 'date-friendly' food, meaning you wouldn't make a mess of yourself while eating. That concept was postponed and the menu was eventually reimagined under the tutelage of Delicious Hospitality Group, the operator of several intimate cafes in New York's upscale neighborhoods of SoHo, Nolita ('northern Little Italy'), and Hudson Yards. Bumble Brew will now serve Italian food. Mangia!

Not the buzz it expected to generate

Bumble, though, has been struggling as a publicly traded company. Despite shares currently trading some 26% above their February initial public offering price, the stock opened at $76 per share that day. This means that initial investors have lost 28% since first buying in.

It reported first-quarter earnings of $1.69 per share on revenue of $171 million compared to Wall Street's expectations of $165 million in revenue generating a net loss of $0.03 per share.

Even on an adjusted basis, Bumble was doing much better than forecast, but analysts weren't moved by the beat or by its rosy outlook for the current quarter and the full year. Bumble and its Badoo sister brand didn't move the needle nearly as much as they should have, and valuation remains a concern.

Bumble regained a lot of the ground lost after its tumble, which means its valuation isn't much better than it was. The stock trades at nosebleed levels compared to future earnings expectations (not unheard of for a company transitioning from losses to profits), and also at more than 10 times sales, and it still isn't producing any free cash flow yet, which opening a restaurant likely won't help.

Staying in its lane

The restaurant itself shouldn't be a deal breaker for investors, since it's just a single location. The risk, of course, comes if Bumble decides to scale up its culinary ambitions and run a chain of cafes.

Bumble at its heart is a tech stock, which is a very different from a restaurant chain. Similar concerns arose when rival Match Group launched a video miniseries for its Tinder service.

At least with Bumble Brew, the situation is more like that of mall operator Simon Property Group acquiring bankrupt retailers, but handing off operations to brand management firm Authentic Brands Group, because running a retail store is not the same as owning a mall.

It's smart that Bumble is partnering with a company that specializes in creating unique dining experiences, though replicating them is not easy; Delicious Hospitality has built only a handful of locations.

Bumble could still sting

Investing legend Peter Lynch had a term for when companies pursue dreams far afield from their circle of competence. He called it 'deworsification,' meaning the business is not diversifying to build strength but is instead engaging in empire building, a pursuit that could bring the whole enterprise down.

Bumble hasn't entered diworsification territory yet, but investors should keep an eye on whether it tries to roll out this concept to more locations or if it goes off on other tangents, undertaking projects that have little to do with its core virtual matchmaking business.

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Bumble is a popular dating app, that uses swiping and matching similar to Tinder, but what sets it apart from the rest is that it puts women in control of the messaging. Only women are able to start a conversation, and they have a window of 24 hours to do it. Basically, Bumble doesn’t mess around. But how does the bumble algorithm work? How do you get matched with potential singles? And how active should you be, in order to have the most success on the app?

Like most dating apps, Bumble hasn’t disclosed exactly how their algorithm works, but theres’s been a lot of speculation from people who have used the app.

Here are a few of the many theories about how the Bumble algorithm works that you may find interesting:

1. People who have swiped-right on you will appear first.
Similar to Tinder, people who have used Bumble have noticed they have more matches early on, which tend to filter out the more time they use the app.

This could be because Bumble has a similar algorithm to Tinder, which prioritizes showing you people who have already swiped right for you. So if you find that you had early success with Bumble, but it slowly dwindled over time, don’t worry too much about it. Give the swiping a bit of a break and see if your matches pick back up after some time away. After all, here are plenty of new people joining Bumble every single day.

2. It doesn’t figure out your type based on previous matches.
It might be that all of the profiles you go for are guys who are tall, with dark hair, and an athletic physique. But it has been noted that Bumble isn’t able to clock onto this, and will continue to show you a variety of profiles that might be the total opposite of your type.

Personally, I think this is great. Too many of us go into dating with a “type” firmly imprinted in our brain, and this leaves no room for allowing yourself to be surprised by someone who might not be your usual type on paper. The person of your dreams might not be 6”3 with dark hair and a six-pack, so try and ditch those rigid ideas for a while and see what happens!

3. If you right-swipe on everyone, you’ll be punished.
Some people have been speculating that if you’re too swipe-happy on Bumble, they will flag your profile and push you right to the back of the queue, where you’ll have a hard time being seen by any new profiles, if any at all.

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Ouch.

This means you’ll be rewarded for using the app in the way it was intended to be used but punished for trying to save yourself time by saying yes to everyone and getting people’s hopes up when you’re really not interested.. So guys—be selective with who you’re swiping for. Don’t be that guy who says yes to everyone like a total desperado.

4. The most popular profiles in your area appear first.
There’s been a lot of talk and controversy with this one, because it suggests that the most popular and commonly attractive profiles are showing up first every time someone logs into the app. (And Bumble isn’t the only app people have had this suspicion about.)

This means people with lower amounts of swipes are being pushed back in the queue, making it similar to being in school when the same kids always get picked last to be on the team.

What ends up happening is the most attractive profiles continue to get the most interaction, while the less popular ones get less interaction. Plus, if you’re messaging someone who’s got a hundred other people trying to talk to them, the chances of you getting anywhere are slim to none.

There’s not much you can do about this apart from try and make sure you look your absolute best. Which brings us on to the next point…

5. Your profile and photos have to look good.
Some people have done experiments creating fake profiles with blurry photos, and not much of the bio information filled out, and found that the match rate ended up dropping significantly.

Here’s what you need to know—if your photos are blurry, heavily filtered, or too far away, Bumble might penalize you. So make sure you get someone to take some decent, friendly images of you on your own.

If you’ve been on the app a while and not had much luck, try switching up your primary photo and see if you have better results.

6. It doesn’t matter how active you are.
Tinder tries to fade out people who aren’t active on their app, but it appears as though Bumble doesn’t have this feature… yet. Even if you haven’t been on the app in ages, your profile will still be shown to everyone—something a lot of people using the app have claimed.

This is a little unhelpful for anyone who matches with someone they like, only to find they never message them back—or message them back months later when they finally log on again. So the best thing you can do to avoid being affected by this is not to put all your eggs in one basket, and not expect everyone to respond to your messages.

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7. You can always have a fresh start.
If you have been struggling to get matches on Bumble, it could be worth deleting your account, and starting again from scratch.

Bumble does show users a warning message when attempting to hit delete, so don’t do it if you don’t want to take the risk. There’s also the option of doing a “soft reset” by uninstalling the app, then reinstalling it again. Give yourself a head start this time by uploading some great photos, and writing an intriguing (but honest) bio.

If you’re looking for something serious, Bumble is a great app to use because of the way it’s geared towards being more selective in the hopes of finding someone special. But none of us can say how the algorithm truly works. All you can do is show up, be your best self, and let cupid do his thing.

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