Online dating giants and startups are betting on a different type of relationship: friendships in hopes of boosting profits.
Bumble, Muzz and Match Group are promoting friend-finding and community-building products as alternative models to digital matchmaking, with the aim of attracting younger users suffering from so-called dating app fatigue.
Bumble, which owns the women’s dating app of the same name along with Badoo and Fruitz, said it is bullish about the “untapped potential” in the “friendship space.”
“The opportunities for us are absolutely limitless,” Chief Executive Officer Lydian Jones said at an investor event this month.
In May, the group acquired Geneva, a community-building product that connects people based on shared interests, building on the friend-finding app BFF released last year.
The move into friendship apps comes as some of the online dating giants struggle with slower growth post-pandemic. Bumble lowered its revenue outlook in August, dropping a quarter of its market capitalization.
Jones said Bumble will focus on “scaling the growth of Geneva and BFF” this fall to “diversify our business monetization model over time.”
Match’s latest app, Yuzu, released in February, is also the company’s first product to explicitly offer a social-only mode in addition to dating features.
The app is designed exclusively for the Asian community and allows users to switch between ‘Social’, ‘Dating’, or ‘Social and Dating’ modes. This feature suggests the $9.6 billion company may expand into a broader portfolio. Over 40 dating brands.
“This is a testing ground for us,” Match Chief Financial Officer Gary Swidler said at an investor conference this month. “I think you can draw a line between what we’re testing with emerging brands, including Yuzu, and what we’re thinking about going forward with Tinder.”
Smaller rivals are also entering the Friendship market this year. Muzz, a 10-year-old Muslim “marriage app” with 1.5 million monthly active users, began rolling out Muzz Social, a friend-finding and social networking feature, in February, according to Sensor Tower .
New users of Muzz Social are automatically added to groups based on their location and can also join networks based on their hobbies and interests. “You automatically have a large community of people to reach out to,” said founder and CEO Shahzad Yunas.
Gay dating app Grindr continues to grow in user numbers as both Bumble and Tinder slump, but it is looking to expand its social network for both friendships and professional networking to expand its user base. We are also considering adding additional features.
Startups are also looking to take advantage of the so-called “loneliness economy” in the wake of the coronavirus pandemic.
Timeleft, a French startup that uses algorithms to match groups of six people to go out to eat together, expanded to the US and UK this year and now operates in more than 200 cities.
Events and social connections company Pie is an app designed to help users meet real locals, as part of what founder Andy Dunn describes as a “mission to break social isolation”. It secured $11.5 million in funding in September.
But analysts are skeptical that the pivot to friendships will significantly boost revenue growth for established online dating companies.
Tinder, Hinge, Grindr, and Bumble all rely on “freemium” subscription models for the majority of their revenue, especially when mainstream social networks like Facebook are free, and the platforms offer users who pay for friendships. Analysts warn that it may be difficult to find
“It’s simple: people are willing to pay more for a relationship than for a friend,” says Citi analyst Yigal Arounian.
In addition to subscriptions, both Bumble and Maz said they are considering paid partnerships and advertising to monetize their friendship products.
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But building a successful advertising business can require major efforts to acquire new users and drive daily engagement with your product. Bumble’s BFF has just 735,000 monthly active users, while its flagship dating product has more than 20 million, according to Sensor Tower.
Combining payments with real-life meet-ups is another option. For example, Timeleft users pay a fee or obtain a membership to reserve a table at the company’s weekly dinners. Timeleft covers the full cost, but users pay for their own meals at partner restaurants.
However, Bumble and Maz have found that even if they aren’t making money themselves, the Friendship product helps keep users engaged with the brand even when they’re not actively looking for a partner, leading to more profitable encounters. The company is betting that it will help provide a path to other businesses.
TimeLeft chief executive Maxime Barbier said friendship products could be the future of online matchmaking. “Dating as it is now – swiping, texting, one-on-one first dates – is dying. People are tired of it and are looking at us as an alternative.”
