In early December, Match Group, the owner of greater than 40 dating apps and by far the market leader on the planet of online dating, held its first investor day since going public in 2015.
The major theme was that the following big shift within the business of romantic connections will likely be artificial intelligence — something the group is pushing hard. “AI goes to rework the dating experience. It’s going to enable us to make all elements of the web dating journey higher,” proclaimed chief executive Bernard Kim.
Behind those optimistic words, nevertheless, were some difficult realities. Although its brands now cater to tens of thousands and thousands of users globally, Match’s market value — roughly $8bn — is only a fifth of what it was three years ago. Last month, Tinder, Match’s flagship brand and the app that arguably invented the trendy dating industry, reported that paid user numbers had dropped on a year-on-year basis for the eighth consecutive quarter.
Nor is it just Match: the world’s biggest online dating corporations are in crisis, as their goal customers, particularly women and younger users, increasingly look elsewhere, towards area of interest apps or real-life meets — and even opt out of romantic relationships altogether. In a recent survey by Forbes, 78 per cent of respondents reported feeling “emotionally, mentally or physically exhausted” by dating apps.
The three largest dating brands globally — Tinder, Badoo (which is hugely popular outside the US) and Bumble — are all shedding users. And those who remain are increasingly unwilling to pay for access. Bumble, which owns each the eponymous app and Badoo, has seen its share price plummet nearly 90 per cent within the last five years.
At Match, activist investors, including Elliott Management and Starboard Value, have began to make their presence felt. In a public letter sent in July, Starboard suggested that the group needed to trim its costs, attract latest users and step up innovation. If it fails to deliver, wrote Starboard’s managing member Jeffrey Smith, “we consider changes should be considered” — including for Match itself to go private once more.
Kathryn Coduto, a researcher at Boston University who has been studying the sector for the past decade, believes it’s long overdue a shake-up. The stigma around online dating is “largely gone”, she says, nevertheless it has been replaced by a way of frustration and burnout. “People were really excited. Now, just ten years later, they’re drained.”
“Customer preferences and desires have evolved,” admits Bumble chief executive Lidiane Jones. “That means our category needs to vary.”
When Tinder first appeared in 2012, it was heralded as a relationship revolution — the app that will change the whole lot within the dating world.
While web-based dating portals had existed for the reason that birth of the web (Match.com, Match’s original platform, was founded in 1995), Tinder which launched to the general public in 2013, had a clever, smartphone-led innovation: the swipe. Users could simply swipe left or right on people’s profiles to reject or accept them. If each users swiped right, they may chat. If only one swiped left, they’d probably never connect.
Many commentators were horrified — soon after its launch the Guardian described Tinder as “the shallowest dating app ever” — but singles signed up of their droves. Tinder had greater than 50mn monthly lively users by 2017, when it was acquired by Match Group and parent company IAC at an estimated value of $3bn. The swipe was replicated by nearly every rival, and the app’s viral popularity helped to destigmatise online dating.
Tinder reached a peak of greater than 73mn monthly lively users in 2020. Since then, nevertheless, the romance has faded. Although Tinder stays by far the world’s dominant dating app, monthly lively users have dropped greater than a 3rd since 2020, based on figures from analytics company Sensor Tower.
Sales have also slipped. The brand made $503mn in direct revenue within the three months to September, down from $508mn in the identical period in 2023, despite increases in subscription costs.
One former worker who didn’t need to be named blamed the corporate’s struggles on “directionless” leadership. Another said that, after years of viral growth, Tinder had not found “a long-term goal”. The return of in-person events because the pandemic receded — and fatigue about digital-only interactions — may additionally have had an element to play, suggests Boston University’s Coduto.
The role of chief executive had been vacant for greater than a yr when Match insider Faye Iosotaluno was appointed in January, becoming Tinder’s eighth leader since its launch.
Speaking on the investor day, Iosotaluno said she was “clear-eyed” concerning the challenges: “Tinder must create excitement again. Spending time on Tinder should be value people’s time and never feel like a chore.”
In an try to “(improve) user outcomes”, Tinder has begun trialling a requirement for users to upload photos of their face (currently optional in most regions), in addition to a “liveness check” that uses biometric scanning to confirm that profile pictures haven’t been faked.
Iosotaluno also promised an “AI-enabled discovery feature” which might suggest matches based on data from user photos and quizzes.
The industry is scrambling to search out “the following novel thing”, says Liesel Sharabi, director of the Relationships and Technology Lab at Arizona State University.
But analysts warn that it is going to be an uphill battle. “Tinder hit a roadblock because users’ perception of it deteriorated in a short time,” says Shweta Khajuria, a senior analyst at Wolfe Research. “It’s very difficult to vary perceptions once they’re established.”
In its November earnings report, Match Group reported lower-than-expected revenue projections. The company also further lowered these projections at December’s investor day, and analysts have since downgraded their share-price expectations.
“We know we’d like to wash up the ecosystem and create higher experiences, especially for younger users and girls, and we’re working on it, but meaningful changes do take time,” chief executive Kim said in the course of the earnings call.
Tinder just isn’t alone in experiencing difficulties. Bumble, which was launched in 2014 by considered one of Tinder’s co-founders as a female-focused alternative, has also struggled to rekindle growth.
After slashing its revenue outlook in August, the corporate shed 1 / 4 of its market value on a single day. A number of months earlier, an promoting campaign pleading with women not to desert romance — taglines included “a vow of celibacy just isn’t the reply” — inspired a backlash after it was accused of shaming individuals who select to not be sexually lively.
Bumble has even scrapped its signature feature: only permitting women to initiate chats, not men (something designed to limit the potential for female users to be harassed or overwhelmed). Women can now add prompts to their profiles for potential suitors to reply, an echo of a feature popularised by rival Hinge.
The company has also been spreading its bets beyond romance. In an attempt to achieve what it calls the “wider connection space”, last yr it launched a friend-finding app called BFF. In May, it also acquired community constructing app Geneva, which helps users form groups or clubs.
At an investor event in September, chief executive Jones said that the chance for Bumble to monetise friendship was “limitless”.
“This moment is pivotal for Bumble because we now have the chance to redefine what online dating can and must be,” Jones tells the FT.
Yet users have complained that, as mainstream products scramble to compete, they have gotten increasingly indistinguishable. “The apps all used to have their very own ‘thing’ but I feel like they’re all becoming the identical now,” says Mark, a 25-year-old based in London.
Even insiders admit that dating apps have a foundational problem: love and friendship are usually not easy for an algorithm to serve up. Humans have complex tastes; the info that many dating apps are built on only provides an approximation of what someone might find appealing — and harder still for the sensation to be mutual.
“Your (favourite) Spotify song doesn’t should such as you back,” says Justin McLeod, the chief executive of Hinge, which was released in 2012 before being rebranded to concentrate on longer-term relationships 4 years later. “It’s a posh, messy problem.”
Two major apps seem like bucking the trend of losing users: Hinge itself, now owned by Match, and Grindr, which pioneered hyper-specific geolocation and was for years the go-to alternative for gay men searching for casual relationships. Both have greater than 10mn lively users and are still growing — albeit more slowly than before, based on Sensor Tower.
McLeod credits Hinge’s success to “product innovation” and a “narrow concentrate on intentional dating”. He, too, sees the longer term being in AI. “I feel the effectiveness of Hinge, specifically, goes to seriously change over the following 6-12 months,” he suggests, saying that matching will likely be based on “rather more nuanced information than we now have today”.
Grindr can be attempting to grow to be what chief executive George Arison characterises as an “AI-first dating product”, which can mine user data to supply matches which are achieved more transparently and higher tailored, because it tries to expand its remit, too, towards longer-term relationships.
“Most products are literally using little or no data for his or her matches at once,” Arison says. “I feel there’s a whole lot of really intimate and useful information in people’s chat conversations.”
The company has also said it is going to develop a chatbot assistant, dubbed the Grindr Wingman, to generate conversation prompts based on users’ profiles and chat histories.
But not everyone seems to be convinced. Tristan, a 24-year-old from London, is fearful about being “pigeonholed” by AI: “People struggle with understanding text messages already,” he says. “Why would we trust AI to read emotions any higher?”
Tinder’s Iosotaluno says she doesn’t want AI integration to disrupt human-to-human connections. “We don’t need a future that appears like a Black Mirror episode,” she says.
The behaviour of human beings themselves on dating apps has long been a priority — particularly men, who make up the vast majority of users on most platforms. Some suggest that because individuals are connecting in virtual space with limited repercussions, poor behaviour is rife: from sexual harassment and unsolicited pictures to “ghosting”, where one party simply disappears without explanation.
Hinge has been attempting to combat these. The app’s latest feature, “Your Turn Limits”, prevents users from matching with more people in the event that they have eight or more unanswered messages of their queue. Bumble, meanwhile, this yr introduced a tool for users to report profiles they consider are using AI-generated images and videos.
For Renate Nyborg, who was Tinder’s chief executive until 2022, this trend towards safeguarding is long overdue. Nyborg, who has since founded AI-powered relationship coaching app Meeno, believes that the dating industry has didn’t help users construct strong relationships — leaving young people specifically “burned by growing up with ghosting”, she suggests.
Critics of the dating industry often have a more fundamental criticism: that the incentives for the companies that make dating apps and folks who use their products are inherently at war. Hinge markets itself as “designed to be deleted” — something that will appear to be in conflict with the necessity for ever-expanding revenue and growth.
The traditional dating-app business model relies on churn: attracting people to enroll, encouraging them to pay for extra swipes or features, then replacing those who leave (presumably once they’ve found love) with fresh users — meaning that corporations, more so than in other sectors, at all times should be replenishing their user base.
Dating apps already face allegations from users that they hide one of the best potential mates to maintain people swiping — theories which have led to entire forums online dedicated to “gaming” the apps. While these accusations are denied by dating corporations, they’re grounded in “the very real lack of transparency” about how matching algorithms work, says Sharabi of Arizona State University.
Hinge’s McLeod rejects the criticism that apps like Hinge try to stop users from finding romance, and insists there may be a market here: “As long as there are single people on the planet, we can have a great business.”
While the dating industry’s major players are betting big on AI, perhaps their biggest challenge is a demographic one: attracting younger users.
A 2023 survey by Statista found that Gen Z was less inquisitive about online dating than millennials were at their age — partly, suggests UK communications regulator Ofcom, which made similar findings in 2024, since the novelty of dating apps is wearing off.
“There’s a whole lot of nostalgia for traditional ways of meeting (because) Gen Z has never existed in a world where online dating didn’t exist,” says Sharabi. Cory Carpenter, an analyst at JPMorgan, agrees: “The issue is that the product-market fit is just not great (for Gen Z).”
In the battle for younger customers in a tighter-than-ever marketplace, Match, Grindr and Bumble are actually competing not only with one another, but additionally with a brand new generation of start-ups.
Feeld, founded a decade ago and headquartered within the UK, is geared toward “open-minded” and “curious” people in search of to experiment with specific sexual kinks, consensual non-monogamy or polyamory (the corporate’s original name was 3nder, until Tinder sued). Monthly lively users reached a mean of 1.6mn within the fourth quarter, based on Sensor Tower, up greater than 10 per cent from the identical period in 2023.
The app has to this point shied away from developing AI features, says Feeld’s chief executive Ana Kirova. “It’s hard to see a way that works without tampering with the messiness of the private journey,” she argues. Instead the corporate has branched into hosting in-person events and recently launched its own magazine.
Another emerging rival, called Breeze, is attempting something much more radical: attempting to ensure that that couples actually meet up. The Dutch dating brand, which launched within the UK in May, doesn’t even allow users to message one another until they’ve arranged a date.
Couples who’ve matched share their availability for a date at considered one of Breeze’s partner bars or restaurants, and might only message within the hours beforehand — primarily in order that they’ll find one another.
The company charges users a fee, currently set at £9.50 per person within the UK, for this primary assignation. One drink is usually included — funded by the restaurant or bar, not by Breeze. There aren’t any other subscription costs. “Our business model signifies that our intentions are aligned with the daters,” says co-founder Marsha Goei.
At least some consumers will likely be attracted, reckons Coduto of Boston University: “Paying for something tangible — an actual date fairly than simply access to a dating pool — might be more appealing.”
Meanwhile, offline meetups seem like making a comeback. More than 476,000 people attended in-person singles and speed-dating events within the US within the yr to November, up 69 per cent from the identical period in 2023, based on ticketing platform Eventbrite.
There are lessons here concerning the importance of face-to-face connection, Nyborg suggests. “If there’s anything I’ve learned, it’s that it’s simply very obscure who someone is from what you see online,” she says.
