MagicLab billionaire Andreev to launch new mobile app business
Andrey Andreev, the Russian-born billionaire behind dating apps including Bumble and Badoo, is planning a swift return to the mobile internet business after selling out to private equity in one of the UK’s largest-ever technology deals.
Blackstone’s all-cash acquisition of Mr Andreev’s stake in MagicLab, the London-based parent company of Badoo, Bumble, Chappy and Lumen, closed this week, valuing the group at around $3bn.
“It has given me the freedom to create something new,” Mr Andreev said. “It’s given me ability, time and money . . . I don’t want to retire.”
While Mr Andreev did not disclose specific details of his next venture, he said that one idea is focused on charity and donations — something he wants make “more accessible . . . the same as what I did with dating”.
MagicLab is now led by Bumble founder Whitney Wolfe Herd, who had previously co-founded rival dating app Tinder.
The deal’s closure follows the publication earlier this week of a legal investigation into allegations of harassment and sexism at MagicLab, following a damning report into the company’s working environment by Forbes.
The six-month probe by law firm Doyle Clayton into 24 separate incidents found that there was “sufficient evidence to uphold three of the minor allegations and to partially uphold three further minor allegations”.
“Following a long and detailed review, we found there to be a lack of credible evidence in relation to most of the allegations, particularly the more serious ones,” said Doyle Clayton, which was hired by MagicLab last summer. “It was concluded that the central allegation made by the Forbes article — that there is currently a misogynistic atmosphere at the London office — is incorrect.”
The law firm recommended a series of changes, including compulsory diversity and inclusion training for all employees, “enforcement of appropriate employee conduct at company parties”, and an anonymous “whistleblowing hotline” for staff.
Speaking to the Financial Times in Mayfair this week, Mr Andreev said the Forbes report was a “big shocking moment for all of us”.
“Now after we got the results of this [legal review], I feel much more comfortable leaving the business,” he said. That the report was released and the deal closed in the same week was “coincidental”, he said.
Born in Moscow but based in London for many years, Mr Andreev founded Badoo in 2006 as a hybrid of social networking and dating. It pioneered the “freemium” business model that charges just a small portion of its audience for optional extras, such as browsing and communications features. Badoo now reaches more than 425m users globally, according to figures released last year.
In 2014, Mr Andreev teamed up with Ms Wolfe Herd to launch Bumble — a dating app that lets women make the first move — after her split from Tinder. Mr Andreev created MagicLab to share staffing, resources and technology between the dating apps, which also include Chappy, a gay dating app, and Lumen, which is aimed at the over-50s. “The business is growing like crazy,” Mr Andreev said.
Magic Lab had explored an initial public offering before agreeing a deal with Blackstone. Talks with the private equity firm began “a number of months” before the Forbes report was published, Mr Andreev said. “I did not sell the business because of this article.”
Now, for the first time in almost 15 years, a non-compete agreement with Magic Lab means that Mr Andreev will no longer be in the dating business. But rather than follow many former start-up founders into venture investing, Mr Andreev is insistent that he wants to remain a “builder”.
“There are so many talented people looking for potential help and I can be a great partner to these guys,” he said. “I don’t want to call this ‘VC’ or ‘angel investment’. I’m talking about me, as a helper to people with great ideas.”
Twenty former Magic Lab staff have joined him in a new venture, based in Mayfair, that will retain Mr Andreev’s longstanding focus on mobile apps and social networking. He plans to hire more soon.
“I am very active, I have lots of energy. I want to involve myself in not just one thing but many things,” he said. “By selling MagicLab, I have a lot of fuel to run my new project.”
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