Venture capital investment in dating apps has seen a decrease in recent months. This is because venture capitalists have not made a lot of money from the online dating industry.
One of the most successful dating apps in recent years, Tinder, was incubated by IAC in 2012 and has not relied on venture capital since. Data shows that Tinder is moving up in terms of iOS-app revenue rankings. Investors who are looking to capitalize on dating startups look for certain attributes. Firstly, it is beneficial if a company is based in China. Over the past two years, the largest funding of $32 million went to Tantan, a mobile dating app that was modeled after Tinder.
Additionally, investors are mostly drawn to startups that offer tools to help simplify dating options. As of now, it seems that the market is lacking in such companies and thus venture capital investment has been decreasing. Most U.S.-based dating startups now see very little funding, with only about $7 million of investments in early-stage companies. This is usually because VC firms look for more loyal and long-term user base, while dating apps tend to short-term users. VC firms would be more interested in investing if dating apps could prove that they can drive long-term growth in revenue per individual user.
Just last week, Matrimony.com Ltd, a dating app based in India, marked the worst debut this fiscal year, with its stock tumbling 8.2% soon after the IPO. This has been the company's second attempt at an IPO; however, it appears that dating apps are not going to work out in India.
Murugavel Janakiraman, promoter and managing director of Matrimony.com, has commented that "India is largely lower middle class, middle class and some upper middle class, and that segment I don't think is comfortable with dating apps." As of now, there is not much action in the dating app industry; however, it is possible that it will pick up as online platforms become more popular among the younger generation.