February 13, 2015
With Valentine’s Day happening tomorrow, it’s natural for many of us single people to want to find dates so as to not spoil taint the themes of the holiday. Because of this desire, we may find ourselves turning to apps like Tinder or Hinge, or reactivating our damned OkCupid profiles, in order to find that last-minute rando with whom to go on a blind date on Valentine’s Day (I mean, that’s totally not weird -right?). Despite consumer popularity of some of these apps (Tinder, in particular – however loose its interpretation of “dating”) it seems that venture capital investors don’t see much promise in dating startups – and the numbers show.
According to CB Insights, VCs invested a mere $64.8 million into online and mobile dating startups in 2014 – that amount is nothing when compared to the larger startup landscape, in which $100 million deals to individual companies have increasingly become a norm. Over the span of the last five years, in fact, dating startups have raised a paltry overall amount every year – with no year seeing a surfeit of $100 million. In 2013, the figures were at a depressingly low $5.2 million – that’s $5.2 million overall for an entire subsection of the startup economy.
Tinder’s success as a dating app is definitely an exception within its industry. Despite the company never having raised a round of institutional financing, Tinder is estimated to be worth between $1.85 billion and $5.15 billion, which could make it potentially more valuable than it’s parent company, IAC Corp. Just last month, the company acquired Tappy – a strategic move that could push Tinder’s valuation even higher as it (presumably) incorporates ephemeral messaging features into its app.
So, the takeaway from this: despite our terrible experiences with online dating sites and matchmaking apps, it’s much better to stick to our current tools than to go off and create an entirely new dating startup. Unless you truly believe you can provide something better than Tinder, it’s better off starting a company in a different industry.
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