Match looks to consolidate its hold on the dating world with Hinge acquisition
Online dating giant Match Group, the company behind popular dating sites like Match.com and Plentyoffish, as well as the hugely popular “hookup” app Tinder, is taking steps to consolidate its lead. The latest step in that journey is the purchase of a controlling stake in competitor Hinge, which was “redesigned to cater to individuals seeking relationships instead of the casual dating (and hookup) culture prevalent in other dating apps.”
Match’s share price has appreciated by 37% so far this year
SOURCE: Yahoo Finance
Match has bought a 51% stake in Hinge, with the option to buy the remainder of the shares in 2019. But, despite the news only just breaking, this isn’t a sudden decision: Match actually started investing in the company as early as September last year, and has a seat on Hinge’s board.
Match has the online dating world pretty much tied up, with two exceptions. The first is competitor Bumble, whose female-first approach to digital romance has proved to be a hit with users. Bumble is tiny next to Match, but the latter was thwarted in an acquisition attempt, and is now suing Bumble for patent infringement. Bumble has since counter-sued, claiming Match is trying to “drive down the asking price” and put-off other interested parties.
The second area in which Match could be challenged was revealed around the beginning of May (check out the share price graph above to see how it affected the company!). That came via Facebook’s announcement that it was getting into the business – and while there’s nothing to suggest Facebook is a natural fit for romance, the sheer size of the company makes them notable. The fact, however, that Match’s share price climbed steadily back after the announcement is, perhaps, a sign that investors don’t see Facebook as a natural disruptor for Match’s business model. If so, the CEOs of both Match and Hinge would agree.
Discussing Facebook’s dating ambitions with Bloomberg, Hinge CEO Justin McLeod said: "Our demographic is millennials and they're using Facebook less and less. I don't see them as an up-and-coming brand that people are going to trust with their dating lives." Given how the year has played out in the news for Facebook so far, he just might have a point!
Dominion holds Match Group in its Global Trends Ecommerce Fund.
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