Tinder’s parent company Match Group is struggling in the dating game
Tinder — which has a reputation for hookups — is failing to attract Gen Zs, and if it doesn’t innovate soon, it runs the risk of turning into this generation’s eHarmony.
The other option for Tinder’s parent company Match Group (NASDAQ:MTCH) is to acquire the next Tinder.
Does “we met on Tinder” have a bad rep?
Ninety percent of Gen Zs are frustrated with dating apps — with top complaints including trouble initiating conversation, getting weird messages and getting catfished.
Instead, younger consumers are turning to emerging dating apps with a twist. Thursday — a newer app that is only live for one day of the week (guess which day) — offersmatches and chats vanishing within 24 hours.
Tinder app downloads fell 5% in 2021 while competitors Bumble and Thursday grew. Bumble (NASDAQ:BMBL) has grown its market share each year since 2017, landing itself on the top three dating apps by market share in 2021:
- Match Group (i.e., Tinder, Plenty of Fish, Hinge) — 69%.
- Bumble Inc. (i.e., Bumble, Badoo) — 22%.
- Grindr — 7%.
It’s a troubling sign for Match Group — which relied on Tinder for over half of its revenue last year.
Lighting a fire under Match Group
Match Group’s disappointing second-quarter earnings report earlier this month sent it down 18% on the day — with its CEO showing signs of frustration while making several changes:
- Restructured its management — notably replacing Tinder’s ex-CEO Renate Nyborg less than a year after joining.
- Paused its metaverse plans and virtual currency, Tinder Coins.
Per Match Group’s CFO, the company is struggling to acquire new users due to a lack of “new and exciting” products — turning to production innovation to give people a reason to come back.
But with the results far short of expectations and the company losing money last quarter, Match Group put out the flame on several of Tinder’s product innovations.
Investors: Dating is a tough game…
…And investing in the dating game might be even harder. $BMBL is down 64% since going public in early 2021 — with Match Group down 66% in the same time period.
They’re also competing for a relatively small pie. In 2021, global dating apps made a total of $5.6B — up 47% compared to 2020 — but still a small amount compared to other industries.
Match Group has relied on acquisitions to fuel growth (i.e., Tinder, Hinge) and with Tinder showing early signs of struggles, Match Group might need to look for its next match soon.