The rise of dating apps has made it possible for people to connect with strangers without meeting face-to-face. During the pandemic, the usage of dating apps was on the rise. With bars and restaurants closed, virtual dates were as good as possible. Therefore, investors should reflect on how technology has changed the dating world and how much potential investing in dating app stocks has for the future.
Due to the rise of digital platforms that enable people to connect and find their partners, the dating services market awaits yearly growth of 6.25% by 2026. With the surge of online dating apps, it is not surprising that investing in dating app stocks is becoming more attractive.
The pandemic-caused increase in the usage of dating apps might be a positive for the long-term growth of dating app stocks. The global dating services market’s value was approximately 6.7 Billion in 2018. This market has in prospect a reach of around 9.9 Billion by 2026.
According to MarketPlace, the number of daily active users of the top 20 apps has reached more than 1.5 million.
Nevertheless, before buying dating app stocks, it is advisable to analyse them thoroughly.
Online Dating Apps
An online dating application is a mobile application that enables users to connect and communicate without leaving their homes. It works seamlessly through a network of GPS-equipped smartphones and various digital photo galleries.
These apps allow users to browse easily and chat with potential dates and romantic partners. The launch of Tinder in 2012 led to the growth of online dating apps. In addition, it established a new market for mobile apps. After the success of Tinder, many other companies started creating dating apps, such as Match.com.
Other popular apps are Bumble, Grindr, and eHarmony. Due to the ability to identify people with similar interests, many religious dating apps have also emerged. Some of these include JDate, Salams, Upward, and JSwipe. Many of the available apps match users based on their personality traits. These assessments help identify individuals who are compatible with each other.
Users can customise the matches they see. They can also exclude candidates. Once users form an interest in a potential partner, they can chat with that candidate. This method of communication saves users time and money. Online dating allows people to meet without having to work around their schedules. It also increases self-confidence by enabling users to see how many other potential matches are out there.
Disadvantages of Using Online Dating Apps
Too many options can be overwhelming when choosing a potential partner. This variety could lead to time waste. In addition, the systems used for matching people may not always work perfectly. Therefore, there are no guarantees that the system will create a perfect match for everyone.
A person’s physical chemistry is fundamental when choosing a partner. However, a profile picture may not be sufficient when looking for the right match. In addition, some dating apps are vulnerable to phishing attacks, which can reveal sensitive information such as sexual orientations, e-mails, preferences, and degrees of interaction between the users.
Due to the nature of online dating platforms, they are becoming a breeding ground for honeypots that create fake profiles and expose users’ private information.
Another issue is ghosting. Ghosting is a phenomenon that occurs when one party in a relationship suddenly stops communicating with the other party.
Ghosting is a severe issue for dating apps as it can lead to users cancelling their accounts. To prevent this from happening, many companies like Badoo and Bumble have launched new features that make it easier for users to end their chats nicely.
How Covid Impacted the Dating Scene?
The pandemic may have wiped out many of the fun things that used to be associated with dating, but the online dating industry is still going strong. Online dating has become an integral part of society, helping users connect and form lifelong relationships.
Online dating has remained relatively consistent globally since 2017. Despite the various changes in the industry, the figures for active users have remained steady. The rise of online dating services has emphasised the practicality of their services amid the pandemic. But, they have also catered to the varying needs of different audiences.
Like social media networks, initially, dating apps target younger audiences. However, lately, older users are starting to adopt digital services unprecedentedly.
Most internet users have concerns about online safety and privacy, but the issue is more prevalent among Gen X and boomer singles.
There has been a lot of discussion about virtually recreating activities during the pandemic, but platforms should not overlook security and privacy considerations. Apps should maintain the same standards of safety for all audiences.
Virtual interactions have become the norm in various social events and activities during the pandemic. Online dating was already a cornerstone of social networking.
Post-Covid Era for Online Dating Apps
While many companies are developing tools that allow users to connect and communicate, the concerns around safety and privacy remain. Therefore, some companies are developing new features that would address safety issues. For example, Bumble made the platform a safer space for women, allowing women to make their first contact.
As older audiences are warming up to the internet, safety considerations are becoming more prevalent. However, these concerns existed even before the pandemic.
While the growth of digital media has brought many changes, it has also provided individuals with vital social connections. As brands look to the future, they must remember that social media and online dating are no longer separate entities.
Online dating is becoming more diverse, with numerous older users looking for love in new ways. During the pandemic, many moved away from traditional notions of dating and into digital-first mindsets. However, we are yet to see whether such a mindset will prevail.
Regardless, safety concerns aren’t going away – dating platforms will most likely have the same safety standards as social media platforms.
How to Invest in Online Dating App Stocks?
The coronavirus epidemics have widely impacted consumers to become more digitally aware.
Match Group, Inc., the leading online dating company, reported in early May that its average subscribers had increased 12% in the first quarter of 2021. Moreover, the changes in consumer behaviour during the coronavirus pandemic will most likely endure. For instance, Momo Inc., which owns the popular Chinese dating platform, beat expectations by reporting a profit increase in the first three months of the year.
Momo’s monthly active users have reached more than 114 million. This number is a double increase compared to five years ago.
Top Dating App Stocks on the Market
Bumble
Bumble changed the game’s rules in small change, letting only women lead and make the first move following a match. This change eliminates the possibility for women to receive unwanted messages. In addition, it allowed men and women to reverse their roles in traditional dating environments.
Last year, Bumble and Badoo’s dating apps reached more than 100 million users, just below rival Tinder’s total. Bumble also has a feature called BFF (best friends forever) for those looking for friendships rather than romantic relationships. According to the company, its user engagement has grown significantly over the past year.
As of April 2022, Bumble’s market cap equals $4.85 Billion. On top of it, its growth potential seems immense. With a 22% market share as of March 2022, Bumble is now the second-largest platform in the US, after rival Tinder. Its robust growth has helped it reach $208.2 million in revenue in Q4 2021.
The company is continually investing in innovation and product development.
Therefore, Bumble is one of the hottest dating app stocks, and investors can buy it on NASDAQ. The symbol is BMBL.
Company Website: https://bumble.com/
Match
Match Group, Inc. is a leading global dating company that owns and operates a variety of popular online dating platforms such as Tinder, OkCupid, Match.com, Hinge, Ship, OurTime, and Meetic. IAC is the parent company of the Match. In 2019, it had 9.283 million subscribers globally. In 2020, it became a separate public company.
The Match Group is the top player in the online dating industry. The company owns the most extensive collection of dating apps in the US. Furthermore, Tinder is also the top-grossing non-game app in the world.
That gives the company a significant advantage over its main rival Bumble, which went public in 2021. However, Bumble is still gaining ground and is anticipating further growth.
Despite the headwinds caused by the pandemic in 2020, the company managed to deliver a solid financial performance and remained one of the best dating app stocks for investors.
Investors should pay attention to Match’s efforts to grow its subscriber base and monetise its platform in the coming quarters. One of such efforts included launching Tinder Platinum.
Investors should also observe the rivalry between Bumble and Match Group, as both compete for the same users. If Bumble succeeds, it would threaten Match’s top line and dilute its earnings. Nevertheless, the company enjoys a competitive advantage and is growing in popularity.
Company Website: https://mtch.com/
Momo
Momo Inc. is a mobile-based social platform. The platform enables users to communicate with each other and customise their profiles. The platform also offers various features and functionalities, such as its mobile application.
Momo enables users to maintain their relationships through private and group communication, content creation and sharing features. It also offers various offline social activities through the platform. The app allows users to create social relationships based on their locations and interests. As a result, users can discover people nearby and connect in a fun and easy way.
The company officially started operations in July 2011. A month later, the company launched the first version of its app for iOS.
In November 2014, it filed for a NASDAQ IPO and was available for purchase in December of the same year.
Momo is a mobile app that claims to find the most personalised matches for its users.
A paid membership gives access to various benefits, such as VIP logos, advanced search options, etc. As of September 30, 2014, Momo had 2.3 million paid subscriptions. The company has integrated mobile games into its platform to monetise a large number of users further. Momo created Dao Dian Tong in August 2014. It is a marketing tool that enables local merchants to create profile pages for their businesses.
Members can now see businesses on the platform, just as they see other users. Further plans include monetising the users by referring them to e-commerce companies like Alibaba.
Company Website: https://immomo.com/
Spark Networks
Spark Networks is a leading global dating company listed on the New York Stock exchange under “LOV”. The company has a headquarters in Berlin and offices in Utah and New York.
Its growing portfolio of apps includes JSwipe, EliteSingles, Christian Mingle, Jdate, Silver Singles, Zoosk, etc.
Spark Networks SE is a leading digital platform that connects users. The merger of Affinitas and Spark Networks in 2017 created the company. Spark Networks SE reported $52.0 million in revenue in their fourth-quarter 2021 financial results.
Company Website: https://www.spark.net/
BlueCity Holdings
BlueCity is an online platform that enables the LGBTQ community to connect and thrive in every aspect of their lives. The Blued mobile app is a central hub of BlueCity’s various platforms and services.
Its users can connect and access a variety of health-related services and solutions. That being the case, Blued has connected more than 54,000 000 users globally since June 30, 2020.
BlueCity Holdings is a small company with a market cap of $48.71M. Traditionally, smaller stocks are less likely to be spotted by institutional investors. However, BlueCity Holdings does have institutional investors holding a good portion of the company.
Like some other dating app stocks, Blue City Holdings has a listing on NASDAQ. The symbol is BLCT.
Company Website: https://www.blue-city.com/en
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This article was last updated on April 14th, 2022.
