Dating apps give investors few cues to swipe right

Match’s share price woes are down to an exodus from Tinder – which lets users swipe right (for yes) or left (for no) on each other’s picture-based profiles. Paying users peaked at nearly 11 million in 2022, before dropping more than 10% to 9.7 million last year. Unlike ad-dependent social media platforms, matchmaking apps have monetised themselves by asking users to pay for premium features, like a boost to their profile’s visibility. These extras are offered via tiered subscriptions, with this model driving the majority of revenue at Match and its competitors.

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With dark clouds gathering, Match and Bumble have acted to cut costs and preserve margins. In June, the latter slashed 240 employees, close to one-third of its global workforce. Meanwhile, Tinder’s parent laid off 13% of its staff in May. Valuations reflect this uncertainty. As of Monday’s close, Match and Bumble trade on 14 and 8 times their respective forward earnings, according to an LSEG poll of analysts. That’s a huge drop from the 20 times and 50 times multiples they commanded just two years ago. And they may have further to fall. Tinder’s annual revenue is expected to stagnate at around $1.8 billion until 2029, according to analyst forecasts compiled by Visible Alpha.