When Joseph Femminella matched with a potential wife on Hinge in 2020, he was already growing tired of traditional dating apps. He asked to meet her in person and they met that night.
The two married three years later, and after a four-year incubation period, Feminella launched her dating app, First Rounds on Me, nationwide in August. The app is designed to help people meet in real life and was inspired by Femminella’s own experiences, he said.
The El Segundo-based app skips the swipe and prompts users to schedule a date and location. Any user can send a date invitation to another user, and the chat will only start 24 hours before the scheduled meeting time.
Feminella’s venture is one of several in Los Angeles and beyond that are challenging the traditional dating app format by introducing innovative ways to encourage face-to-face interactions. In an industry that relies on a steady demand for human connection, new players are emerging as younger daters start using the big apps less.
Los Angeles has become a hotbed of dating app startups looking to grab attention in a crowded market and capitalize on cracks that are starting to appear within the most popular apps.
Joseph Ferminella, founder of the dating app First Round’s on Me, runs an El Segundo startup with his wife, Hannah, whom he met on Hinge in 2020.
(Christina House/Los Angeles Times)
A handful of apps, including Tinder, Bumble and Hinge, dominate the online dating market, but have struggled to grow in recent years, experts say. Bumble is headquartered in Austin, Texas).
One reason: Gen Zers use online dating about 11% less than the general population, according to Match Group survey data from financial services company Oppenheimer Holdings.
“While the online dating industry remains profitable, it currently faces challenges from a growth perspective,” said Andrew Malloch, an industry analyst at Raymond James. “The customer base is changing, and there are differences in how Gen Z and Millennials want to meet people.”
Bumble, which once distinguished itself from other dating apps by requiring women to send a first message, has seen its stock plummet 55% this year after missing revenue expectations. The company’s stock closed Thursday at $6.57, up 1.08%.
Tinder, the dating app giant that launched in 2012, recorded the highest number of paid users in 2022, reaching 10.8 million after years of rapid growth. The number of paid users of the app decreased by 5% year-on-year in 2023, and by 8% in the second quarter.
Match Group, which owns Match.com, reported a 4% year-over-year increase in second-quarter revenue and a 5% decline in operating profit for the period to $205 million.
For the record:
October 11, 2024 11:45 a.m.Match CEO Gary Swidler said on an earnings call that Hinge’s annual sales are expected to reach $1 billion. An earlier version of this story hinted that he was referring to Match.
Still, CEO Gary Swidler said on an earnings call earlier this year that he was confident Hinge was on track to reach $1 billion in annual sales.
Breaking away from the “swipe model”
When online dating began in the mid-’90s, platforms were primarily profile-based, matching users with common interests and values. It was common for users to take personality quizzes or fill out surveys in order to be matched.
Los Angeles-based Tinder’s launch introduced a swipe model that allows users to “like” or “dislike” potential dates based on their photos and short bios. Other apps, such as West Hollywood-based Grindr, which targets gay men, use location-based models that allow users to browse potential dates in their area.
Tinder, Bumble, and Hinge still dominate the online dating market, but they face serious challenges in terms of growth. why?
“Products continue to evolve in the market, but swipe-based models have gained the most traction in recent years,” says Malloch. “We know that doesn’t resonate with younger users.”
Malloch said Gen Z daters prefer a slower, more intentional approach to finding a partner, preferring an approach based on substance rather than spur-of-the-moment decisions. And the younger someone you date, the more likely they are to turn a friend into a partner, he said.
“When you look at swipe-based apps, their purpose is to put a bunch of strangers in front of you, which is in some ways a contrast to how Gen Z wants to meet people,” Malloch said. he says.
New dating apps are trying to offer users a break from swiping fatigue, and a number of Los Angeles startups are incorporating more sophisticated matchmaking services and group events for singles.
Feminella’s First Rounds on Me hosts group social events, including a recent pickleball gathering in West Hollywood that drew about 100 singles. The private app has around 175,000 users and, like its competitors, uses a freemium model where customers can choose to pay for specific features.
Femminella, 34, hopes her app can offer users a different experience than what they’re already finding on the most popular dating apps.
“We’ve seen dating apps become more unintentional and validation-driven,” Femminella said. “I think they’re missing the point.”
Several other apps have held in-person events in Los Angeles, including London-based Feeld, which has been available in California since its 2014 launch.
“We strongly believe that it is people who unlock, not apps, so it was important to us to create another dimension in the real world for our members to connect,” Field CEO said. said Anna Kirova.
Summer, a dating app launched in 2022 by Marina del Rey-based technology company 9count, also aims to prioritize in-person interactions, creating a members-only social club. When users match with someone on the app, they only need 25 messages to commit to a date before the conversation is locked.
The Venice-based Lox Club hosts regular events for its members, including weekly Shabbat dinners. The company recently launched two community-based dating apps: Jade Club for East Asian daters and Amara Club for South Asians. Rocks Club is also preparing to introduce a matching service that uses artificial intelligence and human matchmakers, and marketing director Samantha Ratiner said the service has a waiting list of 10,000 people. That’s what it means.
“The consensus is that people are done overusing and swiping these apps,” Latiner said. “It can be very difficult and a waste of time.”
There are already tech-enabled matching services in Los Angeles that move away from the traditional dating app format, such as Three Day Rule, a self-described “modern matchmaking” company.
There seems to be a dating app for every person and every niche. The League is a platform for students and alumni of elite universities to find each other. Kippo is a dating app for video gamers. The Fruitz app allows users to search for others who are looking for the same type of relationship.
“There’s definitely room for apps that focus on specific interest groups or demographics,” Malloch said. “In the app-based dating market, the barriers to entry are relatively low, but the barriers to scale are quite high.”
Jason Helfstein, an analyst at Oppenheimer & Company, said that despite the large number of smaller apps, the market remains largely dominated by three publicly traded dating app companies: Grindle, Bumble and Match Group. He said he is doing so.
A Match Group spokesperson said Tinder serves an average of about 50 million users per month, a scale no other app in its category has reached. A 2023 poll conducted by OnePoll on behalf of Tinder found that 55% of singles in the US, UK, Australia, and Canada between the ages of 18 and 25 have been in a serious relationship with a partner they met on Tinder. It is said that there is.
Match Group is building its own assortment of community-based dating apps, making the field even more crowded for startups. From 2020 to 2023, Match Group’s apps for gay men, single parents, Christians, and Black and Latinx communities saw direct revenue growth of more than 70% compounded annually, a spokesperson said.
Femminella said his company, First Round’s on Me, has seen monthly growth in subscriptions and revenue and has had success with in-person events. He declined to provide financial details, but said he knows that realistically the company can’t compete with apps like Tinder and Hinge.
Tinder user, mobile phone logo.
(Match Group / Tinder)
“For me to get there, they’ll probably just buy me out,” Femminella said.
Helfstein said small dating app companies are likely to experience some growth and then go bankrupt or be sold to a larger company.
“For private companies that focus on small niche markets, it ends up being too expensive to grow,” he said. “There won’t be any more publicly traded dating companies.”
Helfstein said the dating app industry, while profitable, is somewhat stagnant. Match Group’s profit margin was 37% last year and is expected to reach 36% this year.
But Tinder downloads have fallen for the third year in a row this year, and Bumble shares fell 30% in August after falling short of Wall Street expectations. Artificial intelligence and other new technologies have the potential to completely transform and revitalize the industry, Helfstein said.
“Maybe five years from now, online dating will be reborn through virtual reality,” he said. “Business is healthy at the moment, but what the market wants is growth.”
