Bumble CEO Whitney Wolfe Herd will step down from the dating app she founded after its shares tumbled 83% since an initial public offering over two years ago.
Lidiane Jones, current CEO of workplace messaging tool Slack, will take over in January.
The shakeup comes as the online dating industry, Bumble included, faces a huge challenge: How to get consumers to shell out for a dating app when the economy is so uncertain? For now, that uncertainty is sending shares of rival Match tumbling alongside Bumble’s.
Wolfe Herd founded Bumble in 2014 with the idea of creating a dating app that let women make the first move, thereby reducing the unsolicited messages that many were bombarded with on other services. As a dating app founded by a woman and designed for women, Bumble burst onto the scene as a breath of fresh air.
In the months after the pandemic, online dating apps experienced a rise in popularity, as people eagerly to kickstarted their romantic lives after being isolated from others during lockdowns. But more recently, growth has slowed.
Bumble, which currently has 40 million active monthly users across its portfolio of apps, is now fiercely fighting for users with Match, the owner of OKCupid and Tinder. To keep pace, Bumble is having to spend more on product development and marketing
The company has also faced questions about its efforts to diversify from its core online dating business. Under the Bumble brand, it added several features to help users find friends and network for their careers, but they have yet to catch on.
“Bumble has failed to execute on its vision of becoming a broader women’s platform for beyond dating use cases like friendship and professional networking,” analysts from investment bank Jefferies said recently. “How the new CEO manages these non-core use cases is a key question.”
Jones, a tech industry veteran of Sonos, Microsoft, and Slack parent company Salesforce, has only been Slack’s CEO for 11 months before being tapped to lead Bumble. Her experience delivering high-profile product upgrades for digital platforms with large user bases could help reinvigorate Bumble.
“This past year together has been the most amount of innovation that Slack has ever unleashed in its history,” Jones told Fortune’s Emma Hinchliffe.
At Slack, Jones had also taken over for a founder-CEO by succeeding Stewart Butterfield, six months after Salesforce acquired his company for $28 billion. For the transition, Butterfield spoke effusively of Jones. “She’s pragmatic and practical, insightful, passionate, creative, kind, and curious…She’s one of us.”
Taking over from another founder CEO
At Bumble, Jones will have a major job ahead of her when she starts in January. The company’s stock has steadily declined since its IPO in 2021, when it shot up 77% to $76 on its first day of trading. The shares would never again reach those heights, declining to $13.07 by market close on Monday.
Over the past several years, Bumble has expanded beyond its flagship, dating app, into a portfolio of brands. In February 2022, it made its first acquisition, the French Gen Z-focused dating app Fruitz, for an undisclosed amount. Then earlier this year, Bumble spun off Bumble BFF, its matchmaking app for platonic friendships, into its own app—another first for the company.
Revenue has grown steadily to $903 million at the end of last year, a 15.7% increase from 2021. Midway through this year, sales growth has slowed to 14.7% compared to the first half of 2022.
During its third-quarter earnings Tuesday, Bumble is expected to provide full-year guidance for revenue growth in the mid to high teens and grow its profit margins by around one percentage point, according to UBS.
Among the key metrics for Bumble is its number of paying users, which stood at 3.6 million in the most recent quarter, a 20% increase from the same period in 2022. While subscriber numbers have grown regularly since Bumble went public, analysts are skeptical about the company’s ability to maintain that growth as users reduce spending in preparation for a possible recession. Bumble’s biggest competitor Match Group saw its shares slide 18% since last week after it reported a 5% decline in paying customers in the third quarter compared to the same period last year. In an effort to reignite growth, Tinder, Match’s biggest app, has been experimenting with more expensive, premium subscriptions that run as high as $500 a month.
These questions will, now, fall to Jones, who will be tasked with answering them and myriad others as she takes over Bumble’s day-to-day operations. Wolfe Herd, meanwhile, will become executive chair and devote herself to the big picture and strategic thinking that she prefers.
“I never started this company to be a publicly-traded CEO,” Wolfe Herd told Fortune’s Hinchliffe. “I started this company to solve a problem that I experienced. I started this company to solve problems for women around the world.”
This story was originally featured on Fortune.com