Acquisitions

Lulu, a dating app designed to help women rate and share information about the men they date, has become part of online dating giant Badoo.

Lulu has had an interesting history. Founded in 2011 by Alexandra Chong, the app was originally created to help women have a safer online dating experience by encouraging them to communicate with other women over the app about the men they dated. Users were given the ability to rate their dates according to looks, humor, ambition, and even sexual prowess. They could also add pre-made hashtags for more detailed examples describing a man, like #OneWomanMan, #WillActSilly or #EpicLaugh.

There’s no doubt about it: JDate is a big name in the world of online dating, and when it wants something, it will go to great lengths to get it. And recently, its parent company Spark Networks decided that it wanted popular dating app JSwipe, owned by Smooch Labs. The two companies struck a deal in late October, and now JSwipe is one of the dating properties of Spark Networks, along with dating sites Christian Mingle and Black Singles in addition to JDate.

JSwipe, which launched in April of 2014, has grown rapidly, with over 450,000 downloads worldwide and over 40 million messages between users. The dating app was definitely posing some competition to JDate, and attracting a younger user base who prefer apps to the traditional dating websites. This made the company an attractive target for Spark Networks, JDate’s owner.

In fact, JSwipe and JDate have had a tumultuous dating history, so to speak. Earlier this year, Forbes broke the story that JDate was suing JSwipe for copyright infringement because JSwipe was using the trademark “J” in the name of their app. In the lawsuit, JDate also claimed it owned the patent on software that “confidentially determines matches and notifies users of mutual matches in feelings and interests,” which would ultimately interfere with all dating apps using this technology (in other words, all dating apps).

JSwipe at first fought back, going to the press with the story of the lawsuit and calling out JDate for trying to shut the app down. JSwipe also started an IndieGoGo fundraising campaign to help them fight the lawsuit against JDate, assumingly because they didn’t have the funds to fight on their own. As it turns out, either the company ran out of money, or JDate put forth a really compelling offer, which Spark Networks said they would reveal later in the company’s 4^th quarter financial statements.

The lawsuit has been dropped and Sparks Networks put out a press release, praising the new relationship between JDate and JSwipe. Michael Egan, Chief Executive Officer of Spark Networks, stated in the release, “We’re very excited to welcome the Smooch Labs team into Spark.  They’ve created a fantastic mobile application that helps young Jews meet and form meaningful relationships, and together with JDate, our leading Jewish focused dating platform, Spark is now able to significantly build on its mission to strengthen the Jewish community through dating and marriage.” David Yarus, founder of JSwipe had equally glowing statements about the union.

While JSwipe remains free to download right now, Sparks Networks has promised that new paid premium services will be rolled out in the near future. For more information on JDate you can read our review of JDate.

Twelve years after Markus Frind founded PlentyofFish as a side project, the company sold to Match Group for $575 million. That's an impressive price for anyone, but it becomes astonishing when you consider the site's origins.

Frind launched POF from his apartment and, for the first six years, didn't hire any employees or raise a cent of venture capital. That would be bad news for any other company, but Plentyoffish.com was already getting 2.2 billion page views a month and generating millions of dollars in revenue.

The risky move turned out to be a brilliant one. Except for the IRS, Frind didn't have to share the funds with anyone. He had money to continue his business, travel the world, and buy anything he could imagine. Match tried to purchase the company for a decade, and Frind could easily say no.

He continued to grow POF on his own. At the outset there was no advertising budget, no business plan, and only a basic website. Frind's experience was practically non-existent, so he taught himself about marketing, business development and product. It wasn't until 2009 that he hired his first developer – and he was still running the business out of his apartment at the time. It didn't matter. By then, he had 10 million users. To say it happened “against all odds” is almost corny.

Frind's perspective changed last year, when his daughter Ava was born. “Having a 10-month old daughter, you start measuring time in different increments,” he said in an interview. “Every day you see something’s different – she’s trying to take her first step, or she’s crawling around. Whereas before you measured the company in milestones in terms of the revenue or user growth or some kind of company target.”

Now, having sold his miracle online dating company to rival Match Group, Frind is contemplating the future. He says he has already bought everything he could personally want, so many hope he will instead use his wealth invest in the startup scene in his hometown of Vancouver.

“I think he will invest a lot more and help a lot of businesses,” said Arash Fasihi, founder of online furniture retailer Cymax Stores Inc., to The Globe and Mail. Fasihi's company recently received an $18 million investment from Frind and made him a director.

Vancouver venture capitalist Boris Wertz has similarly high hopes: “He’s a smart guy and he knows how to deploy money, and hopefully some of that will flow back into the tech ecosystem.”

For more information on Frind's dating site your can read our Plenty of Fish review.

Anupam Mittal, Founder and CEO of Shaadi.com, has stepped down from his role as CEO of the company. According to reports, he will now focus on Shaadi's corporate developments, new businesses, and international expansions. Gourav Rakshit, former chief operating officer, will take over Mittal's role as CEO of Shaadi.com.

“Day to day responsibilities will now move to Gourav, while I still continue to guide the company with a focus on corporate development and acquisitions,” said Mittal.

Rakshit, who has already been looking after day to day operations of the venture, will take on full responsibility for Shaadi.com. He is an MBA alumnus of IIM-Ahmedabad who has held various positions at Shaadi since October 2007. Previously, he worked at Infosys, Planetasia, and Nestle.

The change comes after a few major moves in Mittal's world. His People Group, which includes app store Mobango and mobile media firm Mauj, merged its property listing portal Makaan with online property broker Proptiger for an undisclosed sum. Makaan continues to operate as an independent entity following the deal.

In January this year, People Group acquired a 25% stake in dating app Thrill, which merged with People Group's dating website Fropper.com.

People Group hopes its next big move will be a new round of funding for Shaadi. The company is looking for at least $100 million to finance its expansion plans.

In preparation, Shaadi has hired Aditya Save, former head of Marico's global centre of excellence for digital and media, to replace Abhishek Maloo as chief marketing officer. Maloo will join Mittal in the corporate development team.

Finally, Shaadi has brought on Ketan Doshi as chief technology officer. Doshi is an IIT-Bombay and Stanford graduate, as well as the former director of product development at BMC Software. Both Save and Doshi will report to Rakshit.

Mittal started Shaadi.com in 1996 before forming People Group to look at other opportunities in the technology arena. He is an active angel investor who has contributed to over 60 startups. According to reports, Shaadi has made over 3.2 million matches as of 2013.

On Tuesday Match Group which is a subsidiary of IAC/InterActiveCorp purchased PlentyofFish Media for $575 million in cash. The deal is expected to close by the end of the year. Markus Frind which is the founder and sole owner of POF started PlentyofFish.com way back in 2003. It was a side project for him to learn a new programming language. It quickly exploded and by 2008 he was earning $10 million a year from the dating site with only a couple of employees. Early this year POF.com reach a milestone and hit 100 million users. The company also predicted it would earn $100 million for the year 2015. On its newly launch responsive mobile site POF currently reports the following statistics:

• 3.5 million singles log into POF.com daily (through the website and dating apps)
• Those same singles generate more than 9 million conversation every day
• From those conversations 1 million relationships are created every year

In the past two years I have heard several rumors about Match being interested in purchasing POF.com. I had heard around $300 million was offered at one point, but it was turned down. For a site earning $100 million in a year with no debt and it’s only real expense is it’s 75 employees that was a pretty low offer (if it is true). Obviously there was some negotiations going on which resulted in Markus walking away with over half a billion dollars. Funny enough, the general rule of thumb in purchasing a website (now these are much smaller sites [smilely: ;]]), is that it is worth about 4 years’ worth of the income it generates. I guess from using this purchase as an example, that the rule is not too far off!

The Match Group has purchased a number of dating services over the past 6 years:

• In 2014 Match purchased How About We
• In 2012 Match buys DateHookup.com
• In 2011 OkCupid was bought by Match.com for $50 Million
• In 2009 People Media was acquired for $72 Million

Combining all of these sites along with Tinder (which Match had funded pretty early on) and adding POF to the mix, this will make the Match Group the undisputed power house in dating online and on our phones for years to come. Acquiring POF will also make the Match Group’s proposed IPO that much more enticing to investors when it happens, which is most likely near the end of the year.

POF is currently a free dating site that offers a paid subscription for an upgraded membership. This upgraded membership offers a number of features like no ads, viewing extended profiles and seeing who has viewed your emails. I am curious to see if the Match Group plans any tweaks to this formula. If they change POF to a completely paid dating site like Match.com (which I highly doubt by the way), then I am sure POF users would be up in arms. I have a feeling they will leave POF.com pretty much the same for now and let it continue as is, in the same way Match Group let OkCupid continue to operate.

IAC is positioning itself to be the center of the online dating world. Its 150 brands are cornering the market, particularly Match.com, OkCupid, and popular dating app Tinder. Now, it’s added How About We to its roster. Neither IAC or How About We disclosed the purchase price.

How About We offers a unique twist in online dating – focusing on the offline part of the process. Members can create date ideas, post them to How About We, and see if anyone cares to join them on the date. This bypasses the typical process of scrolling through profiles and matches as you would do on other sites.

The company has gone through a lot of changes in the last couple of years, starting with broadening its reach to include curated dating services for couples (extending their user base and approach beyond just the singles market). More recently, the company purchased popular online dating site Nerve.com, and added three new content websites to the mix to offer editorial on dating advice, celebrities, sex, relationships, and other hot topics.

Did it spread itself too thin?

According to the New York Times, How About We co-founder Aaron Schildkrout (now the chief executive for This Life, Inc., the parent company of How About We) thinks this will only broaden their opportunities. “We spent the last five years building and scaling HowAboutWe; our unique ‘offline dating’ experience has been used by millions of people and has helped many, many people fall in love. Our new partnership with IAC will help us bring this dating experience to an even larger number of people than ever before.”

This contradicts his statements earlier this year, where he positioned the company to compete heavily with IAC. “The online dating business is completely monopolized — IAC owns online dating,” Schechter told Fortune in January. “So what we’re trying to do is build a media company whose sole focus is love. And we think that’s the way to beat IAC.”

The How About We dating service and media properties were sold to IAC, but a portion of the company remains independent: the couples service. Last month, employees were reportedly left in the dark about whether or not they would be fired in the wake of the acquisition, with some being promised they would stay only later to find that offer recanted.

According to the New York Times, some employees will be moving to IAC, others will be staying to work on the couples service, and some have been laid off.