“There’s a large swath of angels/funds who categorically refuse to invest in the dating category in the same way that many refuse to invest in games, hardware, gambling,” writes Andrew Chen, a startup adviser and former venture capitalist in the San Francisco Bay Area.“It’s an uphill battle for dating apps to attract interest.” Still, some entrepreneurs are getting help from venture capitalists, who have poured 8.8 million into the industry since early 2010, according to Dow Jones Venture Source.
“In terms of revenue, the online-dating industry has matured, but there are too many players and not a lot are generating sufficient revenue for these sites,” said Britanny Carter, analyst for research firm IBISWorld. They point to a constellation of challenges to growing the next dating app into a billion-dollar company: Although the stigma associated with dating apps is fading, people don’t tend to push their friends to join the latest hit dating app, satisfied customers leave and expanding into other cities essentially requires creating a new marketplace.
As dating sites and apps like Tinder and eharmony continue to grow in popularity, many of the companies behind them are finding it difficult to compete in the saturated market and to attract investors. Plus, there haven’t been many successful dating startup exits.
are expected to make $1.17 billion and dating apps are expected to log $628.8 million this year, up from $1.08 billion for dating sites and $572 million for dating apps in 2014, according to IBISWorld.
At the same time, some dating apps are looking for hookups of their own.
withdrew its plans for an initial public offering last month after more than a year of delays.