Contributed by: kellyseal on Friday, January 24 2025 @ 05:29 pm
Last modified on Friday, January 24 2025 @ 05:33 pm
Match Group is refocusing the strategy for its most popular dating app Tinder, the company announced this week. It faces increasing pressure from activist investors to improve its financial forecast.
Match Group said in its recent investor day meeting that it plans to “prioritize improving user experience over monetization,” According to Bloomberg. The idea is if Tinder moves away from its reputation as a hookup app it can reverse the continued decline in paying users.
The company also shared that revenue will be flat or in decline through 2026, but will start to turn around in 2027 with slow, single-digit growth, according to Bloomberg[*1] . Shares in Match Group fell during the meeting as these proclamations were made.
CEO Faye Iosotaluno shared that Tinder is testing new features, like requiring face photos in profiles, the opportunity for double-date matches, and match recommendations curated by AI. A big hurdle for many dating apps is improving safety on their platforms, and these features will help address concerns. The idea is that AI-driven safety features like these will help curb bad behavior on the app, which she hopes will strengthen the company’s business in the long run – but will come at the cost of losing some paying users in the short term.
The industry overall appears to be at a crossroads, and Tinder isn’t the only app seeing a decline in revenue. The dating market is changing with younger singles turning to social media and in-person events rather than meeting people by paying for a dating app subscription, though there are certain dating apps like Hinge that have bucked the downward trend.
Match Group is betting on creating a safer environment for users and hoping that the numbers will follow.
The company’s activist investors aren’t so sure, according to Bloomberg. Starboard Value, one of the investors, has proposed a sale of the company if it fails to turn things around. Along with Elliott Investment Management and Ansun Funds Management, the investors are pushing for growth at Tinder, which has lost significant market value for Match Group since its peak in 2021.
Hinge was a bit of good news at the meeting, with CEO Justin McLeod projecting over 20 percent growth in 2025, beating analyst estimates. He attributes this to AI enhancements such as conversation prompts and assistance and date suggestions. Hinge will also expand into new markets including Mexico and Brazil in 2025.
Iosotaluno seems to be taking a page from Hinge’s playbook and said in the meeting regarding Tinder’s prospects: “We’re adjusting our focus to be on product innovation beyond monetization, making sure our drumbeat of features meets and delivers for the changing needs, expectations and behaviors of daters today.”