Dating site business model

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To be successful, new entrants must have a differentiated offering.[5] Attracting a large enough user base is the main hurdle – it is challenging for new companies to recruit new users when they do not already have a substantial pool of other users.As a result, marketing costs for new firms are disproportionally high.This transaction had the following characteristics:[25] This information is from only one transaction and as such should not be used without further analysis.As with selecting publicly traded guideline companies, care should be given to select private transactions that share similarities with the subject company.Industry Description The online dating industry (SIC 7299, NAICS 812990) consists of companies engaged in online matchmaking services.

In order to communicate with other members and view full profiles, clients must pay a subscription fee.

So I decided to take it upon myself to do some in-depth research into the online dating industry and was quite shocked with what I found.

In the UK alone, the dating industry turns over 3.7 billion and mostly all it offers is a complex platform for anyone to sign up on and leaves people to go it alone.

The availability of financial data for publicly traded online dating companies makes it possible to compare a subject company to industry benchmarks and apply industry multiples.

However, when valuing an online dating company, it is important to use benchmarks and multiples based on companies that are similar to the subject company and be aware that multiples of certain publicly traded corporations as a whole may not necessarily reflect those of their online dating divisions.

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