Dating apps were an easy go-to when lockdowns started because of their convenience, but dating apps have a long history before that. They were all the rage a few years ago, from an investment standpoint, until a real issue emerged.
The users were there. They swiped and uploaded pictures and did all those things a developer wants. But they weren't paying... In economics they'd be called freeloaders. That's when investments cooled down, which helped Match pretty much take over.
But that's changed in a way that I think is likely permanent.
I rounded up the top dating apps in the US (full list below) and summed up their revenue over the last few years.
Led by Tinder, the heavy-weight champion of the bunch, dating app revenue nearly doubled since the beginning of 2021. In absolute terms, that equates to an additional $90M in net revenue. And that's per month!
In 2021, the top 10 apps earned $1.6B of net revenue across the App Store and Google Play, and yes, that's billion, with a capital B.
So I think it's safe to say that even though freeloaders are still the main users of dating apps–which we can clearly see by looking at all the negative reviews Bumble has been getting over the last few weeks after moving more features behind the paywall–the paying side of things is now much more lucrative.
What does that mean for competition? Normally, with a segment like this, you'd expect that more money = more competition, but when it comes to dating apps, that's not exactly what's going on.
Starting a new dating app won't be an easy move, but it's not impossible either. What I think we'll see more of is moves like Bumble's, that aim to monetize better, and overall more pushing for apps that have some popularity but not enough discovery. OkCupid, I'm thinking of you here.
Investors and apps in this category are likely monitoring every move competitors are making and its impact on their revenue estimates. And those that don't... well, those won't get far in 2022.
FYI - The apps I analyzed here include Tinder, Bumble, Hinge, Plenty of Fish, Badoo, Match, OkCupid, Hily, HUD, and eharmony.
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