Big changes may be coming for Tinder and Hinge

Activist firm Elliott Investment Management has built a $1 billion stake in Match Group, the parent company of Hinge, Tinder, and other dating platforms, and plans to push for unnamed changes to turn the company’s performance around, according to a new report by the WSJ.

The move comes as Wall Street is swiping left on dating apps. Tinder, the biggest dating site in the world by user count, generated ~$1.8 billion in revenue in 2022, up 9% from 2021. Revenue for Hinge increased 44% year over year.

But while revenue is increasing, user growth is slowing – especially among Gen Z.

• An Axios survey of ~1,000 US college and grad students from November found 79% didn’t use any dating apps. In 2019, around half of 18- to 29-year-olds in the US reported using a dating app.
• Match’s value has reflected this trend accordingly. The company boasted a market cap around $40 billion in 2021, and closed yesterday's trading session with a market cap of $10.6 billion.

Looking ahead… Dating apps are still forecasting future revenue growth. And, since the pool of potential users is projected to largely remain unchanged or even decrease, this growth can really only come from one place – increasing the average revenue per user (by raising prices, adding paid features, etc.).

🤔 The conundrum: Dating apps are reportedly designed to be deleted… but the sooner the app gets deleted, the less money the company makes.