Acquisitions

Spark Networks and Affinitas GmbH have entered into a definitive agreement to combine in a stock-for-stock merger. The merger will bring together leading global brands like JDate, ChristianMingle, EliteSingles, and eDarling to cater to a broad spectrum of users with a presence in 26 countries, creating a more diverse and balanced footprint.

With nearly 500,000 period-ending subscribers and over $115 million in revenue for the twelve months ended March 31, 2017, the combined company would be one of the world's largest online dating providers on a pro forma basis.

The transaction has been approved by Spark's Board of Directors and is expected to close in the fourth quarter of 2017. The combined company will be named Spark Networks SE and will be headquartered in Berlin, Germany, while maintaining a significant U.S. presence with offices in New York City and Lehi, Utah.

Early last year Beijing Kunlun purchased a large stake (61% for $93 million) in Grindr. Well they must have liked the results of the purchase as it has been announced that they plan to purchase the rest of the shares (31.47%) for $152 million USD. This means they will become the sole owner of Grindr.

Grindr currently is based in Los Angeles, California. The dating app matches gay men based mainly on photos and location. The app currently has 27 million registered users from almost 200 countries with 30% of them from the United States. For more on this dating app you can read our Grindr review.

Cast your mind back to 2004. The year was a big one for the blossoming industry known as social media. Facebook debuted and went on to become the world’s largest social networking platform. Tagged and Hi5 also launched in 2004, and though they remained relatively under the radar, both earned significant revenue through games and paid features.

Tagged purchased Hi5 in 2011. After renaming the parent company ‘If(we)’ and changing its focus to social app development, revenue began to drop. Plans for an IPO were also dropped. Now, six years later, social discovery platform MeetMe has acquired If(we) for $60 million in cash.

It’s good news all around for MeetMe. The social discovery service, founded in 2005 to connect users on mobile devices, has posted better-than-anticipated financial results for the second quarter of 2016. The company also announced plans to acquire Skout, a leading global mobile network for meeting new people.

Wall Street’s initial projections predicted $15.27 million in revenue for MeetMe. Instead, revenue exceeded expectations, climbing 48% from last year and clocking in at $16.4 million. Mobile revenue rose 82% to $15.1 million year-over-year. Mobile represented more than 92% of MeetMe’s total revenue in the second quarter.

Adjusted EBITDA increased 109% year-over-year to $6.0 million, reflecting a 37% adjusted EBITDA margin. Non-GAAP net income reached $4.8 million, a 103% increase over Q2 of last year.

There has been speculation that Match Group’s star performer in the online dating space – dating app Tinder – would cannibalize its other online dating companies. But so far, contrary to analysts’ reports, this hasn’t happened.

Tinder is by far the dating app industry giant, with over 25 million active users and about 1 million paid subscribers in its tiered program. Some analysts have feared that because of Tinder’s rapid growth and free platform, it would mean users would leave other popular online dating sites in Match Group (like Match, Plenty of Fish and OkCupid) to join Tinder, making them obsolete.

What they found instead was that Match Group’s overall earnings were up in the first quarter of 2016, thanks in part to the POF acquisition and Match Group’s strategy to grow and invest in Tinder’s rivals.

Overall revenue came in at $285 million in its first quarter, $3 million over expected revenues.

Greg Blatt, chairman and CEO of Match Group, said in the first quarter earnings release: "Match Group posted very strong revenue and Adjusted EBITDA growth in the first quarter, driven by exceptional growth at Tinder, solid performance of Meetic and Match, and the PlentyOfFish acquisition."

Bank of America Merrill Lynch explained that "even without Tinder, Match would have grown its core Dating subscribers by 6% (up from about 1% last quarter) and its Dating revenue by significantly more."

The POF acquisition is an important factor in the revenue numbers. The dating website grew tremendously itself over the years with 70 million registered users, and operated for many years on a shoestring budget with one employee, Markus Frind, who created the dating site and sold it to IAC (Match Group’s parent company) for $575 million in 2015.

Over time if Tinder’s popularity continues to grow, and the app itself makes improvements that resonate with its users, then there could be an impact to Match Group’s other businesses. For now, POF, Match, and OkCupid are still going strong.

One solution that has been floated in the media is for Tinder to advertise other Match Group properties on its app. (Tinder’s revenue comes mainly from paid advertising, rather than its tiered service.)

For the most part, online daters are not beholden to one site or app, preferring to join two or more at any given time. Because of Tinder’s growth, it has grown the entire online dating industry in just three short years, and made online dating a more acceptable practice. Numerous dating apps are launching every week, hoping to cash in on Tinder’s market share and success.

It seems to be a win-win for the online dating industry as a whole, even in a saturated market.

Tinder, the swipe-for-matches dating app owned by IAC's The Match Group, is acquiring the startup behind the popular communication app Knock Knock.

The San Francisco-based startup, called Humin was founded by serial entrepreneur Ankur Jain and David Wyler in 2012. Humin's first product was a platform for managing contacts. Later the company launched Knock Knock, a stand-alone app that offers users options to connect with nearby individuals when they tap twice on their phone.

It’s not hard to see why Tinder would be interested in a company that fosters in-person interactions. Tinder has now inked a deal to acquire Humin's intellectual property, technology, and team (though Jain has given his employees the option to stay or leave). Jain will join Tinder as vice president of product, while Wyler will become the company's vice president of partnerships.

"It's clear that the team deeply believes in our vision and future plans," said Tinder's co-founder and CEO, Sean Rad, in a release. "We're excited to leverage their experience and IP to accelerate our product roadmap along with some other exciting projects we have in the works."

"What gets me stoked is that this [acquisition by Tinder] gives us the ability to do what we can do at scale," Jain said. "Dating is just one piece of Tinder's mission and vision."

The acquisition was likely in the works for some time. Tinder was in the market for an acquisition and Humin was struggling to raise further capital. Rad and Jain, who have known each other for years, finally discussed the possibility of joining forces last autumn.

"We talked about our visions for connecting people in the real world, and the challenges there we could solve," Jain told Inc. "It was kind of a shock, but he said 'we should think about an acquisition.'"

Exactly how Tinder plans to use Humin's technology is unclear, but speculation has been made that Humin’s background in contact management and location-based functionality will be used to evolve Tinder beyond the dating space. The app hopes to become a service with a broader mission of introducing people in real life, whether or not romance is in the cards.

Whatever the future holds, Jain is excited about it. "Tinder is on the cusp of massive growth because it's just starting to embrace the breadth of its mission of helping people meet and connect in the real world," he told Mashable. For more on the Tinder dating app please read our review.