Bumble's First Acquisition Raises 3 Red Flags

Bumble (NASDAQ: BMBL) recently agreed to buy Fruitz, a French dating app that lets its users express their intentions with four fruit-based metaphors: cherries, grapes, watermelons, and peaches.

In a press release, Bumble says Fruitz "has seen rapid growth across France, Belgium, Netherlands, Switzerland, Spain, and Canada" since its launch in 2017, and that it's "particularly popular" with Gen Z users. Bumble didn't disclose the terms of the deal, which marks the company's first acquisition.

On the surface, Bumble's acquisition makes sense. It only operates two main apps, Bumble and Badoo, while its larger competitor, Match Group (NASDAQ: MTCH), owns more than a dozen dating apps. Adding a third app to its portfolio could widen Bumble's moat and enable it to reach more users.

Source Fool.com