Technology sector updates
Sign up to myFT Daily Digest to be the first to know about Technology sector news.
Lockdown proved an unexpectedly amorous time in the lives of online daters. Shuttered clubs and bars sent people on the hunt for virtual connections. Those habits have stuck even as restrictions ease. Sales at dating app giant Match rose 27 per cent to $708m in the second quarter of the year.
More importantly, the group managed to add 15m paying users. Many were located in wealthy countries with pricier subscriptions. Revenue per paying customer rose a tenth over the period.
Double-digit growth from a group already dominant in its field is encouraging. Yet its share price fell 2 per cent. For a better relationship with investors Match must clarify its intentions.
Match was spun out of IAC in 2019 and houses legacy dating names such as OkCupid along with newer brands such as black dating app BLK. The network effect is in full force. The more people using an app such as Tinder, the more others are encouraged to sign up.
This explains Match’s still expanding market share. In the first quarter of the year it accounted for 64 per cent of dating app installations in the US, according to data from Business of Apps. This is up from 57 per cent in 2018.
The cost of sourcing new users has fallen as a result of this trend. In the last quarter, Match spent the equivalent of 18 per cent of revenue on sales and marketing. In the same quarter in 2019 it spent 19 per cent.
Competition is widespread but relatively unthreatening. Bumble listed this year, raising $2.2bn. But it has a fraction of Match’s user base.
Given its success in the dating game, why is Match apparently so keen to focus on friendship? Its acquisition of South Korea’s Hyperconnect for $1.7bn this year was its largest to date. But Hyperconnect is a social networking rather than a dating site.
Hyperconnect offers users real-time translation and focuses on video — both one-to-one interactions and broadcasts. Maybe these will be employed for romance. But if Match has something more ambitious in mind it should let investors know.
Our popular newsletter for premium subscribers is published twice weekly. On Wednesday we analyse a hot topic from a world financial centre. On Friday we dissect the week’s big themes. Please sign up here.