Match Group

November 08, 2020

Thesis - Match Group own and operate a collection of the most popular internet dating services. Whether you’re looking for casual dates or a serious partner, Match has a you covered with brands such as Tinder, Hinge, Plenty of Fish and Pairs. Think of Match as the Coca-Cola of internet dating, a holding company covering all niches and tastes. They have over 40 products in 40 languages serving users in 190 countries. Acquisitions are a core part of the company strategy, finding apps which cover a niche or angle they don’t yet serve and adding them to the blend of services. Since their IPO in 2015, the company has been continuing to grow its brands and double down on monetisation. Tinder, the companies flagship product, is the highest grossing lifestyle app across most countries. Match Group is a pure play on the mega tailwind of internet dating.

Financials & Performance - Match went public in 2015 with a market cap of around $3b. At over $30b today, it’s 10x in just under 6 years. Revenue growth can occasionally be inconsistent, with negative growth numbers in some quarters to 40% growth in others. But the long term trend is growing users and monetisation. With 75% gross margins, this is a company with high profitability potential.

Risks - One risk with dating services is that the ultimate success of using them, means you’d never use them again. However, Match’s strategy of providing a range of services from casual (Tinder) to more serious (Hinge) protects them against this. In the dating segment, apps can rise to popularity very quickly, with strong network effects, so their M&A strategy is key to keeping and eye and potentially buying new interesting properties.

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Written by Stevan Popovic, growth investor, web developer and founder of this site.