Tinder, Bumble: dating services suffer on Wall Street

Love is made of ups and downs and for now, honeymoon between Wall Street and dating services seems to be a thing of the past. For two weeks, the world leader in the sector, Match Group (Tinder, Hinge, Meetic, etc.) sees its market capitalization evolve below the symbolic wall of 10 billion dollars, i.e. a drop of 80% since October 2021. Its main rival, the bumble group (badoo, Fruitz , Bumble) is also struggling. Since his IPO early 2021 the firm saw its course sink by almost 77%, to 3.7 billion capitalization.

“These are services that have been boosted by the health crisis and the excitement has since subsided. This explains the heavy correction on the stock market, notes Jérôme Colin, in charge of strategy consulting at Fifty-Five. More generally, this shows that there is a slowdown in this market which seems to be maturing”. A paradigm that did not prevent Bumble from posting good growth in the last quarter. Between January and March, the group saw its turnover take off by 16%, over one year, to 243 million dollars and its subscriber base reached 3.5 million people. His historic record.

“Bumble is a newer band than Match and is still in an acceleration phase. But during the last quarter, the group was not profitable [perte nette de 2,3 millions de dollars : NDLR]) and revenue per user is stagnating, notes Jérôme Colin. Conversely, Match still displays an operating margin of 25% and has a very broad portfolio strategy with nearly fifty different applications allowing it to cover almost all market segments, when Bumble has only three. marks”.

The stagnation of Tinder

But not enough to appease the fears of Wall Street with regard to Match. The reason ? The latter is very dependent on its flagship service and cash cow Tinder. Last year, it represented 56% of the total turnover of the firm which came close to 3.2 billion dollars. But eleven years after its creation, Tinder starts to stick out its tongue – the brand’s revenues have stagnated in the last quarter – and that’s it Match is running out of steam.

After peaking at over 16.5 million subscribers at the end of September, the company has just recorded two consecutive quarters of decline and has seen its paying customer base drop to 15.9 million people. As a result, the turnover of the Dallas firm fell by 1%, over one year, between January and March. A fall of 3% for the fringe of paying subscribers.

A sector in search of innovation

“There is a form of disenchantment among users regarding dating. It is a market that needs to reinvent itself, argues Jérôme Colin. Moreover, the leaders of Match and Bumble only talked about innovations and technologies during their last quarterly results”. While waiting to find the new functionality that will revitalize the market or the arrival of a “killer-app” shaking up the codes like Tinder in its early days Match seems to have entered into a whole new strategic logic.

Since the beginning of the year, the group has been testing a “premium” version of Hinge – its second most popular brand after Tinder – whose subscription could amount to up to 60 dollars per month, i.e. almost four times the Netflix standard offer price. In March, Mark Van Ryswyk, product manager of Tinder, let it be known that his teams were working on a future version whose price could potentially reach… 500 dollars monthly. One fact is certain: by thinking of raising its prices to deal with a breakdown in growth, Match proves that dating is becoming an industry like any other.