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According to Crunchbase data, there were 43 funding rounds to VC-backed companies in the dating space last year, totaling more than $31 million. The vast majority of companies raised angel, pre-seed and seed rounds (only three were of a different stage–Series A), meaning VC interest in the dating sector last year was focused on the earliest-stage companies.
Among the companies to raise money are audio-based dating apps, video-based dating apps, and meme-based dating apps (yes, really).
There are a few reasons that VCs are investing in dating apps that embrace new formats.
First, it’s been about a decade since dating apps like Tinder and Hinge were founded. Typically, every 10 years or so, there’s a new wave of dating platforms that emerge and try to unseat the incumbents, according to Kim Kaplan, CEO of video dating app Snack. Kaplan previously spent about a decade at the dating website PlentyOfFish.
Tinder and Bumble were the first truly mobile-first dating platforms to rise to popularity. Now, dating apps are coming up in different formats. “You’re seeing this next wave coming up that’s saying, ‘What are the new mediums people want to see in dating?’” Kaplan said.
Legacy companies, like the dating behemoth Match Group, are simultaneously working to incorporate audio, video and more engaging ways to interact into their dating apps. In Match Group’s case, that’s most notably for Tinder and Hinge, both of which it owns. The company also owns older dating websites including OkCupid and PlentyOfFish.
Match Group bought Korean social media company Hyperconnect for $1.73 billion last year. Its integration is part of a shift in Match’s mission to not only connect daters, but connect people in other social formats, Wedbush Securities analyst Ygal Arounian wrote in a research note late last year.
“Most notably, Tinder is evolving to include a virtual and metaverse-like experience in Explore and Hyperconnect is, no question, an integral part of this,” Arounian wrote, adding that the moves had “potential significant long-term implications” even though it was still in the early stages.
Consumer experiences generally are becoming more immersive, whether through augmented reality, virtual reality or other ways to interact, according to Josh Ogundu, founder of the audio-based dating app Heart to Heart. People became accustomed to a certain way of connecting with each other, Ogundu said. In the case of dating apps, it was by looking at photos of another person and reading an ultra-short bio.
“Even when these dating apps came out, the reason why they focused so much on images was there was the Instagramification of the world at that time,” Ogundu said.
Instagram was the buzzy social media app a decade ago, so other apps followed suit in being image-driven. But now, many people want something different because they’ve used the same sort of app for so long, he said.
The majority of the dating companies that raised money last year were early stage, raising pre-seed or seed rounds, Crunchbase data shows. Among them were Snack, Heart to Heart and Dive, which connects people through gaming.
The resurgence of investment in consumer tech in general is also driving more funding to dating startups. The explosion in popularity of apps like TikTok and Clubhouse, in particular, have brought consumer technology back to the forefront, according to Kaplan.
“VCs are really cyclical in terms of their investing theses, and consumer (tech) was out for a while and VCs weren’t funding consumer apps,” Kaplan said. “I think you’re seeing a new wave of consumer funding, and dating apps are part of that.”
Illustration: Dom Guzman
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