Online romance is booming globally. In 2023, over 381 million people used digital matchmaking services. This number is expected to soar to 452 million by 2028. The US, UK, and Belgium lead the charge, with about 17% of their populations embracing virtual dating. Clearly, love in the digital age is on an upward trajectory.
The dating app market is a thriving industry, with new players constantly emerging and innovating. As social distancing demands fade and economic turbulence stabilizes, the post-pandemic era is an opportune time to invest in dating app stocks, just in time for a more ‘normal’ Valentine’s Day in 2024 and beyond.
Key Takeaways:
- The dating app industry continues to grow rapidly, with increasing user adoption and revenue potential.
- Match Group (MTCH) remains the market leader, owning popular apps like Tinder and Hinge.
- Bumble (BMBL) differentiates itself with a female-empowerment focus and expanding beyond dating.
- Hello Group (MOMO) offers strong potential in the Asian market, particularly China.
- Grindr Inc. (GRND) targets the LGBTQ+ community and has shown consistent user growth.
The Rise of Dating Apps
the dating app industry is experiencing a resurgence. With pandemic-era social distancing demands fading and economic turbulence subsiding, this year might mark the first time since 2019 that the social landscape returns to a semblance of normalcy. This shift presents a golden opportunity for dating app stocks to thrive.
The global online dating market size was valued at USD 9.65 billion in 2022 and is expected to reach USD 10.49 billion in 2023. The market is projected to grow at a compound annual growth rate (CAGR) of 7.4% from 2023 to 2030, reaching USD 17.28 billion by 2030. grandviewresearch
Performance Comparison of Top Dating App Stocks
| Company | 1-Year Return | Key Dating App(s) |
|---|---|---|
| Match Group (MTCH) | -12.0% | Tinder, OkCupid, Hinge, Plenty of Fish |
| Bumble (BMBL) | +16.0% | Bumble, Badoo |
| Hello Group (MOMO) | -15.5% | Momo, Tantan |
| Grindr Inc. (GRND) | +88.8% | Grindr |
4 Best Dating App Stocks to Buy in 2024
The companies we have listed are based on hedge fund interest, using data from Insider Monkey’s Q1 2024 report.
1. Match Group (MTCH)
Number of Hedge Fund Holders (Q1 2024):
Match Group stands as the undisputed leader in the online dating industry, boasting a diverse portfolio of popular dating apps and websites. MTCH remains a strong contender for investors seeking exposure to the dating app market. Match Group owns and operates a wide range of dating platforms, including Tinder, Match.com, OkCupid, Hinge, and PlentyOfFish. This diversification helps mitigate risk and cater to various user preferences.
Tinder, Match Group’s flagship app, continues to be the most popular dating app globally, with millions of active users. The company has been investing heavily in artificial intelligence and machine learning to improve user experiences and matchmaking algorithms.
Match Group (MTCH) First Quarter 2024, saw a 9% year-over-year revenue increase to $860 million, driven by a 16% rise in revenue per payer (RPP). Tinder’s direct revenue grew 9% to $481 million, with RPP up 20%. Hinge experienced impressive growth, with direct revenue up 50% to $124 million.
However, the company faced challenges, including a 6% decrease in total payers and a 9% decline in Tinder payers. Match Group Asia’s direct revenue fell 6%, while Evergreen & Emerging brands saw a 4% decrease. Operating income dropped 7% to $185 million, though adjusted operating income rose 6% to $279 million.
According to Wall Street Analyst on MTCH stock. Of the 28 analysts following the stock, 13 give it a Buy and 11 has it at Hold.
Why We Picked Match Group:
Match Group earns its top pick status due to its dominant market position and diverse app portfolio. Tinder’s continued popularity, coupled with niche offerings like Hinge and OkCupid, provides MTCH with unparalleled market share and revenue streams. The company’s consistent financial performance, demonstrating both growth and profitability, appeals to investors seeking stability in the tech sector. Match Group’s proven track record of innovation and successful international expansion strategies position it well for future growth. Its strong brand recognition and economies of scale create a significant competitive advantage, making it a compelling choice for investors in the dating app market.
2. Bumble (BMBL)
Number of Hedge Fund Holders (Q1 2024): 30
Bumble has carved out a unique niche in the online dating market with its female-centric approach. Bumble’s innovative strategy and growing user base make it an attractive option for investors. Bumble’s signature feature, which requires women to initiate conversations in heterosexual matches, has resonated with users and differentiated the app from competitors.
Beyond dating, Bumble has expanded into friendship (Bumble BFF) and professional networking (Bumble Bizz), creating a more comprehensive social platform. Bumble has successfully positioned itself as a feminist-friendly, socially conscious brand, appealing to a growing segment of socially aware users.
According to insidermonkey, Citadel Investment Group, led by Ken Griffin, holds a stake in Bumble (BMBL) worth approximately $60.1 million, consisting of 5.3 million shares.
Bumble Inc. reported strong first-quarter results for 2024, with total revenue increasing 10.2% to $267.8 million. The Bumble App saw an 11.1% revenue increase to $215.8 million, while Badoo App and Other Revenue grew 6.9% to $52.0 million. Total Paying Users rose to 4.0 million, up from 3.5 million in the previous year. However, Total Average Revenue per Paying User (ARPPU) decreased slightly to $21.84.
The company’s financial health improved significantly, with net earnings of $33.9 million (12.6% of revenue) compared to a net loss of $2.3 million in the same quarter last year. Adjusted EBITDA also saw a notable increase to $74.0 million, representing 27.6% of revenue. These results demonstrate Bumble’s continued growth and improved profitability in the competitive online dating market.
According to Wall Street Analyst on BMBL stock. Of the 24 analysts following the stock, 14 give it a Buy and 9 has it at Hold.
Why We Picked Bumble:
Bumble stands out as a top pick for its unique women-first approach, which differentiates it in the crowded dating app market. This distinctive feature has fostered strong brand loyalty and attracts users seeking empowered dating experiences. Bumble’s successful expansion beyond dating into friendship (Bumble BFF) and professional networking (Bumble Bizz) demonstrates its versatility and opens up additional revenue streams. The company’s focus on user safety and meaningful connections resonates with socially conscious consumers and investors alike. With significant room for international growth and a history of innovative feature development, Bumble offers exciting potential for user acquisition and revenue expansion in 2024 and beyond.
3. Hello Group (MOMO)
Number of Hedge Fund Holders (Q1 2024):
Hello Group, formerly known as Momo, is a leading player in the Chinese online dating and social networking market. Hello Group offers investors exposure to the rapidly growing Asian dating app market. Hello Group’s Momo app is one of the most popular dating and social networking platforms in China, with a large and engaged user base.
The company generates revenue through live streaming, premium subscriptions, and virtual gifts, providing multiple avenues for growth. Hello Group’s acquisition of Tantan, often referred to as the “Tinder of China,” has strengthened its position in the online dating market.
Hello Group Inc. reported a decline in financial performance for the first quarter of 2024. Total net revenues decreased by 9.2% to RMB2,560.4 million (US$354.6 million) compared to the same period in 2023. Live video service revenues saw a significant drop of 13.3%, while value-added service revenues decreased by 4.9%. The company attributed these declines to proactive operational adjustments, a soft consumer sentiment in the current macro environment, and product changes to improve the Momo app’s ecosystem.
The Momo segment experienced a decrease in net revenues, falling from RMB2,510.1 million to RMB2,318.9 million (US$321.2 million). Similarly, the Tantan segment saw a decline from RMB308.6 million to RMB241.5 million (US$33.4 million). Despite these overall decreases, there were some positive notes, including a 26.2% increase in mobile marketing revenues and rapid revenue growth from new standalone apps, which partially offset the declines in other areas.
According to Wall Street Analyst on MOMO stock. Of the 12 analysts following the stock, 6 give it a Buy, 5 has it at Hold and 1 calls it a Sell.
Why We Picked Hello Group:
Hello Group makes our top picks list as it offers unique exposure to the massive Chinese dating app and social networking market. As a leading player in the world’s most populous country, MOMO presents significant growth potential. The company’s diverse product offering, including the Momo platform and Tantan (often called “China’s Tinder”), caters to various user preferences. Hello Group’s strong understanding of local culture and its ability to navigate China’s complex regulatory environment give it a competitive edge. The integration of live streaming features provides an additional revenue stream, setting it apart from Western counterparts. For investors seeking growth opportunities in Asian markets, Hello Group presents an intriguing option.
4. Grindr Inc. (GRND)
Number of Hedge Fund Holders (Q1 2024):
Grindr is the world’s largest social networking app for gay, bi, trans, and queer people. Grindr’s niche focus and recent public listing make it an interesting investment opportunity in the dating app space. Grindr is the most popular dating app for LGBTQ+ individuals, with a strong brand recognition and loyal user base.
The app is available in over 192 countries, providing broad international exposure. Grindr’s premium subscription offerings provide a steady revenue stream and opportunities for upselling.
Grindr Inc. reported improved financial results for Q1 2024, with revenue increasing to $75.3 million from $55.8 million in Q1 2023. While still posting a net loss, the company significantly reduced it from $32.9 million to $9.4 million year-over-year.
Adjusted EBITDA saw a substantial increase, rising to $31.6 million from $22.0 million in the previous year. The company’s Adjusted EBITDA margin also improved, reaching 41.9% compared to 39.4% in Q1 2023, indicating enhanced operational efficiency.
According to Wall Street Analyst on GRND stock. Of the 3 analysts following the stock, 2 give it a Buy.
Why We Picked Grindr Inc:
Grindr earns its place among our top picks as the leading dating app for the LGBTQ+ community. Its strong brand recognition and loyal user base in over 190 countries offer investors exposure to a global, niche market with growth potential. Grindr’s efforts to expand beyond dating into health services and community resources demonstrate its adaptability and potential for diverse revenue streams. As social acceptance of LGBTQ+ relationships continues to grow worldwide, Grindr is well-positioned to benefit from expanding user bases in new markets. The company’s focus on user safety and community support aligns with increasing investor interest in socially responsible companies, making it an attractive option in the dating app stock landscape.
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Conclusion
The dating app industry presents a compelling investment opportunity in 2024. With social dynamics returning to pre-pandemic norms and technological advancements enhancing user experiences, companies like Match Group, Bumble, Hello Group, and Grindr are well-positioned for growth.
FAQs
1. Are dating app stocks a good long-term investment?
Dating app stocks can be a good long-term investment due to the growing popularity of online dating and the potential for continued industry expansion.
2. How do dating app companies make money?
Dating app companies typically generate revenue through a combination of methods, including premium subscriptions, in-app purchases, advertising, and data monetization. Some apps also offer additional services like events or merchandise.
3. What are the main risks associated with investing in dating app stocks?
Key risks include intense competition, potential market saturation, regulatory challenges related to data privacy and user safety, and the possibility of changing social attitudes towards online dating. Economic downturns can also impact user spending on premium features.
4. How might advancements in AI and virtual reality impact the dating app industry?
AI and virtual reality have the potential to significantly enhance user experiences by improving matchmaking algorithms, enabling more immersive virtual dates, and creating more engaging in-app experiences. Companies that successfully integrate these technologies may gain a competitive advantage.
5. Are there any emerging markets that present significant growth opportunities for dating app companies?
Yes, emerging markets in Asia, Latin America, and Africa present significant growth opportunities for dating app companies. These regions often have large, young populations and increasing smartphone penetration, creating favorable conditions for the adoption of online dating platforms.
