Match, Bumble Fight the Ick


Investors have fallen in love with tech subscription companies lately, faced with the reality that there is no infinite growth. From Netflix to Peloton, even the best platforms seem to eventually face commoditization. Dating was no exception: Match and Bumble shares are down an average of nearly 59% over the past year as of Wednesday’s close. During this period, the tech-heavy S&P 500 lost less than 5%.

Dating giant Match Group MTCH -0.71%

tackled its lifecycle debate head-on in its earnings call last week, pegging its total addressable market outside of China at more than 700 million people. Match’s shareholder letter shows that the total number of monthly active users last year is approaching 100 million, suggesting many untapped opportunities yet to come. Then again, the company also said that in the United States and Western Europe, almost half of its addressable market had tried a dating app at one time or another.

Like other US-based subscription platforms, online dating companies are looking to expand internationally to tap into markets where their apps have historically been underutilized, but where they believe the opportunity is particularly ripe. Bumble BMBL -8.32%

made a big effort in India, for example, to attract women in particular; while Match has had great success with its Pairs app in Japan.

But they also appear to be seeking to regain attention in more entrenched markets, where they may have lost some of their shine. Despite the cornucopia of dating apps, which cater to everyone from cat lovers to bearded men, large communities are still relatively underserved. Earlier this year, for example, Match launched Stir, an app aimed at single parents. This seems particularly appropriate in the United States, which has more children living with single parents than any other country, according to Pew Research. And in what Match said was a first dating app, its Hinge app last quarter released conversation starters specifically for the LGBTQ+ community.

Match said last week that he plans to introduce premium features on Tinder aimed at women later this year. While Tinder is the No. 1 dating app in the world, Match said its earning features are more appealing to men in terms of the value they offer. On the Bumble app, women take the first step. His measurements showed that female users may have a higher willingness to pay for dating apps than males.

Bumble, meanwhile, has sought to transition from dating to friendship and professional relationships. It said Wednesday that it expects a broader consumer-facing announcement for its friendship feature, BFF, in the third quarter. He also said he would add the purchase of virtual goods as gifts later this year.

Last year, Match’s Tinder launched Tinder Explore, giving users the ability to search for goals like friendship or availability tonight before swiping. It also bought Hyperconnect, a South Korean company focused on social discovery and video, last year. It plans to apply its technology to its app portfolio as demand for video explodes in apps like TikTok and even video-centric dating apps like Snack.

Match announced last week that it will welcome a new chief executive, Bernard Kim, at the end of the month, replacing former Tinder chief executive Shar Dubey at the helm. Mr. Kim’s experience at video game developers Zynga and Electronic Arts suggests Match will place a lot more emphasis on social gaming and discovery in the near future. Jefferies analyst Brent Thill estimates the social discovery market could be twice as big as the dating market.

It’s not like more traditional dating platforms have been put to pasture. Amid a sea of ​​tech companies suddenly focusing growth on earnings, Match and Bumble made money last quarter, and not just on an adjusted basis.

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Match increased user revenue by 20% in the first quarter, with Tinder increasing revenue by 18% year over year. Bumble said its total revenue for the first quarter rose 24%, while revenue from its Bumble app rose 38%, better than Wall Street had expected. That earned Bumble shares at least a 10% rise in after-hours trading on Wednesday, though it was down 65% in the past year before its quarterly earnings release.

Both companies have warned that the current quarter will bring distinct headwinds, such as the war in Ukraine, macroeconomic challenges and, perhaps most troubling, tensions with Google over how it handles payments on its payment system. mobile operations, all of which could weigh somewhat in the short term. growth.

Dating investors seem to have grown bored with the status quo. Match and Bumble will have to give them more reason to fall back.

Write to Laura Forman at [email protected]

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