In today’s Finshots, we tell you why dating apps have hit a growth slowdown and if they can turn themselves around.

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The Story

If you’d looked up online dating in 2019, you’d have thought the business was booming. Nearly 1 in 5 couples worldwide had met through a dating app. People loved the simplicity of just quickly swiping right or left to choose or drop a potential match. It’s no wonder that 250 million people globally had a dating app on their phone back then.

Then came 2021, and things got even better. The pandemic locked everyone indoors, pushing dating, like everything else, onto the internet. With more people than ever looking for love online, it seemed like the perfect moment for Bumble to go public. And when it did, its market capitalisation hit $13 billion on the first day of trading.

But if you had invested in Bumble back then, thinking that online dating was the next big thing, well… let’s just say that investment would be worth peanuts today. That’s because Bumble’s market capitalisation has now plummeted to about $720 million, which means that a $1,000 investment in its stock would be worth just $66 today.

And it’s not just Bumble. Match Group, the company behind Tinder (the world’s most popular dating app), OKCupid, Hinge, Grindr and Plenty of Fish, has also seen its stock take a beating. It’s down nearly 80% from its peak in 2021. And when these companies recently reported weaker-than-expected earnings, their stock prices only dropped further.

So, what went wrong with online dating, you ask?

To get to the bottom of this, you first need to understand how dating apps make money. Contrary to what many believe, online dating isn’t a new phenomenon. It actually dates back to 1995 when Gary Kremen, a Stanford graduate, had a lightbulb moment. “Why not use the internet to help people find love?”, he thought.

At the time, the internet was still a novelty, but dating was expensive. People had to use premium-rate phone lines that charged $3 per minute to connect with potential matches. So Kremen’s idea was simple ― make dating cheaper and more accessible. That’s how Match.com was born.

Fast forward a few decades, and Match Group had become an industry giant. But there was one problem. Dating apps were too efficient. If people found their perfect match quickly, they’d leave. And fewer users meant less money.

So, dating apps found a way to keep users hooked. They adopted a freemium model which meant that they were free to join, but the premium features were locked behind a paywall. Want better profiles? Pay up. Unlimited swipes? That’ll cost extra. Even visibility within the app came with a price tag. The goal wasn’t just to help people find love, it was to keep them swiping for as long as possible.

But this strategy backfired. Users started experiencing something called ‘dating app fatigue’, where sifting through endless profiles became exhausting. Even when they found a match, there was no guarantee that the other person was looking for the same kind of relationship. The cycle repeated — swipe, match, chat, move on. And over time, people started losing interest. The proof is in the pudding. Global dating app downloads have been falling from 287 million in 2020 to about 237 million in 2023.

And then there’s the trust issue. Many users misrepresent themselves online, leading to disappointment and eroding faith in dating apps. This loss of trust, combined with the paradox of choice, has made people less willing to pay for these services. And when paying users drop, so do revenues.

You could look at how pathetic the earnings results have recently been. Match Group’s revenue in 2024 was $3.5 billion, up by a measly 3% from the previous year, while its paying users dropped by 5% to 14.9 million. The last quarter was even worse. Revenues declined by 1%, and paying users fell by 4%. Bumble had a similar story to tell. It generated $1.07 billion in 2024, with revenue growing just 2%. What’s worse is that its losses widened from $552 million in 2023 to $557 million in 2024. And analysts now predict that its revenue could shrink by an average of 1.3% every year for the next three years.

So, does this mean online dating is doomed?

Well, not quite. That’s because the real game for dating apps isn’t about trapping users in an endless cycle of swipes. It’s about figuring out why people are losing interest in paying for the experience in the first place.

One big reason is that after the pandemic, more people, especially Gen Z have started ditching dating apps and are opting for real-world connections instead. They’re still potential users, but they’re not the kind to shell out money for a date when they can simply meet new people at clubs, colleges or social events, all for free.

Even Match Group admitted this shift. In a letter to shareholders last year, it noted that younger users were looking for “a lower pressure, more authentic way to find connections”.

So Tinder decided to switch things up. Instead of just virtual matches, it started hosting in-person meet-ups. Think cooking classes, running clubs and other activities where sparks could fly naturally.

But Match Group isn’t stopping there. It has mastered the art of dominating the online dating space — snapping up competitors before they become real threats. And this strategy could actually work in its favour. These days, people don’t want to scroll through a generic dating app and feel lost. They want something tailored to their needs. So when niche apps like Muzz (a British dating and marriage app for the Muslim community) start gaining traction, Match knows it needs to pay attention and maybe even make a move.

That’s exactly why Match went on to acquire different dating apps over the years. Take Hinge, for example. Those looking for serious relationships are more likely to choose it over Tinder. LGBTQ+ users gravitate towards Grindr. This shift towards niche dating apps isn’t just about preference. It’s proving to be more profitable as well.

Just look at the numbers. In 2024, Hinge’s direct revenue surged 39% year-over-year to $550 million, driven by a 23% increase in paying users (1.5 million) and a 13% rise in Average Revenue Per User (ARPU) to $29.94. Grindr’s full-year results weren’t broken down separately, but its first half of 2024 showed a similar growth streak. Revenues jumped 34% to $117 million, while gross operating profit climbed 40% to $68 million, powered by over 14 million active users. Compare that to Tinder’s modest 1% rise in direct revenue and 8% ARPU increase, and you’ll see why Match is doubling down on specialised dating platforms.

Bumble is taking notes too. Last year, it acquired Geneva, an online platform that helps people form real-world groups and clubs. In 2022, it also bought Fruitz, a dating app tailored to the French community.

These moves signal a shift that dating apps are no longer just about swiping.

But will these changes be enough to revive the industry?

Only time will tell.

Until then, love, or at least the business of it, remains a work in progress.

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