Cupid has gotten rid of his shares in the online love business and has returned, arrow and bow in hand, to mediate in person between potential couples. According to the latest reports, Generation Z has gradually returned to dating in person, leaving behind the boom that dating apps experienced during the pandemic.
Applications like Tinder, Bumble or Badoo have lost steam among their younger clientele and many others who have stopped paying for the service. So much so that the business model has been gradually sinking in the market until these days registering the lowest data in its history. “During the pandemic all my friends were on Tinder because it wasn't paid. I was too, but that's over now. Now we meet on Snapchat, but not to flirt,” says Linnea, a 17-year-old Swedish exchange student in Barcelona.
The company Bumble, parent company of the dating apps Bumble – which was created to empower women in their search for a partner – and Badoo, has seen its shares fall from 76 dollars (70.85 euros) in 2021 to 13, $57 this week. A collapse of more than 80% in less than two years, which has led its executive director, Whitney Wolfe Herd, to resign. Its main competitor, Match Group, owner of Tinder and OkCupid, among others, is also in low hours and accumulates a similar drop in its shares, going from almost 140 dollars (130.50 euros) to about 29 dollars in the same period of time.
The paradigm shift among young people of generation Z is not the only reason for the crisis in an already saturated sector. Current inflation has also led to this, along with the growing distrust generated by artificial intelligence due to the proliferation of false, but increasingly credible, profiles.
The online dating market, which has more than 300 million users around the world, has been the protagonist of a success story focused on the last 10 years and crowned in 2020, during the pandemic. Profits, users and shares had been on par in terms of growth to date. According to the latest report from the English consulting firm Business of Apps, in 2022 it generated almost 5 billion dollars, about 4.6 billion euros, worldwide; Of them, just over 24 million were in Spain.
However, this year, business figures have plummeted, and one of the biggest victims, Bumble (Bumble, Bumble for Friends, Badoo, Fruitz and Official), announced a few days ago, along with the sad results of the third quarter, the resignation of the company's alma mater, Whitney Wolfe Herd, who will leave the position of CEO on January 2 in favor of Lidiane Jones, current CEO of Slack. “As I reflect on the past decade, I am humbled by what our team has accomplished and the passionate community we have managed to create. I'm also incredibly optimistic about the future. I believe more than ever in the important potential that Bumble has today,” said Wolfe Herd in the official statement issued by her company.
Bumble, which went public in early 2021, has fallen 36.25% so far this year alone. Gone is the euphoria of the pandemic, which caused dating app users to grow by 18%, especially among the youngest, according to the Statista portal. Currently, Bumble's valuation barely reaches 4.2 billion dollars (3.8 million euros), far from the 20.3 billion it reached at its beginnings on the stock market. A full-blown puncture that has affected the love sector in the financial markets.
Match Group, parent company of Tinder, Hinge, Match, Meetic, OkCupid, Pairs, PlentyOfFish, Azar and Hakunaque, started 2023 by laying off about 200 workers, 8% of its global workforce. It had closed 2022 with shares at less than half the value of how the year had started ($112.70 in January compared to $44 in December), and despite the good performance of its flagship, Tinder, the shares They have continued to fall throughout 2023, to $30 per share these days.
To finish giving in on the stock market, the owner of Tinder presented last week an income forecast for the fourth quarter below estimates (between 795 and 785 million euros) and pointed to the “stubborn inflation and unrest in some markets.” like Israel” as part of the problem.
But the truth is that the progressive flight of users among the younger generations is also part of the explanation. “I still keep my free version of Tinder because when I travel it helps me socialize and meet people. To flirt, never; better in person,” adds Pau, a 21-year-old young man from Valle who, after the pandemic, found his calling under the sea, as a scuba diving instructor.
Also, the American consulting firm Generation Lab, in its latest study on the use of dating apps among university students, estimates that 79% say they do not use any, not even once a month. In contrast, the majority say they prefer to meet people in person. Of all those surveyed, none have been registered for a premium version.
“Dating a friend is imposed once again,” says Professor of Innovation at IE University Enrique Dans, who confirms that young people already prefer other dynamics to online matches. “I would say that they even consider them outdated and uncomfortable due to the number of messages that have to be answered,” he adds, predicting a future for this type of apps more focused on the adult segment of the population.
On the other hand, matching in these applications is a sign of success (or conquest for the user), but at the same time it progressively reduces the company's customer base. “Apps of all types and nuances have been appearing, but they are businesses in which if you do it very well, you yourself remove clients from the list,” analyzes Dans.
Growth expectations are what move the market in the stock market, and not turnover, recalls the Innovation professor. And the expectations generated by dating apps are currently going through a moment of great crisis.
This is also reflected in the market analysis carried out by Deutsche Bank on the behavior of Match Group shares, which emphasizes investors' concern about the long-term trajectory of the behavior that Tinder's paying users are going to have. , the crown jewel of the group. According to the analysis, due to the current economic situation, an increase in paying users in the application is not expected until well into 2024, although Tinder is expected to maintain its leadership on a global scale and that Hinge, also part of the group, will become consolidates its position in third position on the list.
A ranking that in Spain is championed by Badoo, with about 594,000 downloads, followed by Tinder, with 562,000, and Meetic, with 301,000, according to AppTweek calculations. And all of them have already begun to launch multiple payment methods in order to attract a new, more profitable clientele. Those who are willing to pay for Cupid to arrive, even if it is on a screen.