Dating giant Match Group announced a series of changes to Tinder’s management team on Tuesday, along with announcing disappointing second-quarter results. In particular, Renate Nyborg, CEO of Tinder, will be leaving the company after less than a year in the top position. Match Group is also ditching Tinder’s plans to introduce new technologies like virtual currencies and Metaverse-based dating.
In a letter to shareholders, Match Group CEO Bernard Kim expressed his frustration with Tinder’s recent performance, noting that the popular dating app has failed to deliver on its typical monetization success in recent quarters and the company’s initial expectations for revenue growth for not fulfilled the second half of 2022.
Kim attributed Tinder’s issues to “disappointing execution of multiple optimizations and new product initiatives,” but added that Tinder’s product execution and speed could still be improved.
Alongside the departure of Nyborg, Tinder will have a reorganized management team that will also include:
- Faye Iosotaluno, formerly of Match Group’s Chief Strategy Officer, as COO of Tinder
- Mark van Ryswyk as Tinder’s Chief Product Officer. Ryswyk is a veteran gaming executive who joined the company in June.
- Melissa Hobley, formerly the CMO of OkCupid, as Tinder’s Chief Marketing Officer
- Tom Jacques as Tinder’s Chief Technology Officer. An 11-year Match Group veteran, he has been Tinder’s CTO for the past five years.
- Advisor Amarnath Thombre. The current CEO of Match Group Americas and 15-year Match Group veteran will advise Tinder’s management team on the product roadmap and growth.
Kim said he will oversee the team while Tinder searches for a permanent CEO.
Reading between the lines, there was also a hint that the younger generation of users may have lost their appetite for dating apps like Tinder – a culture shift that isn’t just down to the ongoing pandemic impact. The letter notes that people have emerged from the COVID lockdowns and are getting back to “a more normal way of life,” but their willingness to try online dating apps for the first time has not returned to the levels before pandemic returned.
Instead, Match Group reports that the highest engagement now comes from existing users.
As part of Tinder’s overhaul, its “dating metaverse” ambitions were drastically scaled back. The company had planned to use its Hyperconnect acquisition to create a new form of online dating in a virtual environment, but those ideas are on hold as Match Group now has to deal with broader issues.
“…Given the uncertainty about the final contours of the Metaverse and what will or will not work, as well as the more demanding operating environment, I have directed the Hyperconnect team to iterate but not invest heavily in the Metaverse at this time,” I wrote Kim. “We will continue to carefully review this space and consider moving forward in due course when we have more clarity on the overall opportunity and feel we have a service that is well positioned to succeed.”
Also on the chopping block was a virtual currency that Match Group was experimenting with as Tinder Coins. (While Match Group was yet to announce blockchain integrations for the coins, virtual currency’s role in its broader Metaverse plans suggested crypto could be part of its long-term roadmap.)
“After seeing mixed results testing Tinder Coins, we decided to take a step back and re-examine this initiative so it can more effectively contribute to Tinder’s revenue,” Kim said. “We also intend to think more about virtual goods to ensure they can be a real driver of Tinder’s next stage of growth and help us unlock the untapped power users on the platform,” he added.
The company still plans to develop features to make Tinder more attractive to women, including a subscription-based package that offers “curated recommendations” as well as features to involve friends in job interviews. Other products are also looking for new features like live video streaming to drive adoption.
Overall, Match posted revenue of $795 million in the second quarter of 2022, up 12% year over year but below Wall Street’s median estimate of $804.22 million. It also posted a loss of $31.86 million, or 11 cents a share, from 46 cents in the year-ago quarter. Analysts had expected earnings of 57 cents per share. Match said its operating loss was $10 million, impacted by a $217 million impairment of intangible assets related to lower financial prospects for its Hyperconnect Azar and Hakuna apps.
Match Group’s paid users grew 10% year over year to 16.4 million. Tinder’s direct revenue rose 13% sequentially, driven by 14% growth to 10.9 million paying users.
Estimates for the upcoming quarter weren’t good either, as Match Group forecast flat Q3 growth to $790-$800 million in revenue, down from estimates of $883 million. Tinder’s revenue growth is expected to be in the “mid-single digits.”
Shares fell more than 20% in after-hours trading on the news.
Updated 8/2/22 6:00 PM ET to clarify that Tinder had not officially announced blockchain integrations for Tinder’s virtual currency.