Love

Love is not in the air for dating apps looking for cash

By Oliver Smith 15 February 2017
Summary

It might not be a great time to start a new dating app...

It may be the season of love, but dating apps are feeling decidedly left out from the festivities as cash for such apps is in short supply.

Last year just $47m was invested globally in dating apps, according to data from Crunchbase – of which $32m went to China’s Tantan (basically a Tinder clone app).

In terms of non-Chinese apps, that’s a nearly 60% drop in investment compared to 2015.

A huge worry as dating apps and services are worth a gigantic £14.5bn to the British economy alone.

Read more: What’s love worth? Billions to the British economy alone

Biggest dating app funding rounds of 2016:

Business logic

Part of the reason for this drop is that dating apps are a hit-driven business. Success is fleeting for most and even the biggest apps only enjoy a brief window to make most of their money.

This kind of business-logic is a worry for venture capital investors who are looking for digital businesses that can drum up millions (or billions) of users and make vast amounts of cash from them for years.

As investors realise this, cash has been drying up.

Compare the $15m that went to non-Chinese dating apps last year, to the $40m that went to non-Chinese dating apps in 2015.

Rekindling the love

While there’s clearly a big year-on-year drop in cash going into this industry, but there are still some success stories out there.

DatePlay, created by The Apprentice finalist Vana Koutsomitis, raised nearly £220,000 through a crowdfunding campaign on Seedrs to build its game-based dating app which launched yesterday.

And last week Blued, China’s biggest gay dating app, raised another $30m to continue growing beyond its current 27m members.

Lets hope dating apps find a new source of cash, and soon, otherwise Britain could be left with a £14.5bn hole in its economy.