Match Group Gains a Second Activist Investor

Dating app conglomerate Match Group has attracted its second activist investor Anson Funds Management LP, who have built a stake in the company.

Bloomberg, who broke the news, also noted that shares of Match Group fell 0.9% in mid-day trading the day the news was released.

Bloomberg also reported that Anson is trying to “change the composition” of Match Group’s Board of Directors, citing reputable sources. The investment firm also discussed with Match Group’s management about embracing AI in its products, which Match Group has already been doing.

Most recently, the company has added AI-based verification features to its star app Tinder, with plans to roll out more features such as photo selection and message prompts using AI across its suite of apps, which include Hinge, OkCupid, Match and BLK among others.

The move comes after Elliott Investments became the first activist investor with a $1 billion stake in the company. The firm was reported to have plans to revamp the company, which might include management and board changes, too.

The New York Times recently did a market wrap-up for the dating app industry, noting that investors are “swiping left” on companies like Match Group until they can prove that Gen Z daters are willing to pay for the service. The article noted that Millennials were the ones to turn to dating apps to meet people, making them mainstream. But now they are older, married and with children, so they are leaving these kinds of platforms. And so far, Gen Z hasn’t been as willing to pay.

In fact, Bumble and Match Group, the two biggest players, have lost more than $40 billion in market value since 2021, when the dating app market reached a high point. The two companies have responded with drastic measures – including layoffs, hiring new CEOs, and putting a lot of resources and attention on generative AI for help with new features.

Bumble’s new CEO Lidiane Jones is even looking to drop the company’s signature marketing tool: letting women make the first move. Jones had said that they are experimenting with giving people the option of letting the men reach out first. In recent interviews she’s noted that younger daters find that women making the first move is becoming a “burden.”

The New York Times spoke with Youssef Squali, an analyst at Truist Securities, who noted that the companies need to focus on recurring revenue in order to appeal to investors. “Wall Street loves subscription models because it gives them the comfort of recurring revenues,” he said.