top of page
  • sFoundation Editor

Will millennials and centennials face "One Hundred Years of Solitude"?

Oleg Gervalov, co-founder and COO of KeYou

Most investors avoid dating industry. That was what I kept hearing when raising funds for my projects. 

I have 5+ years of experience in a dating industry, launching and managing a profitable product with over 1 million users. For all the times, the investors I dealt with were predominantly skeptical, rather than optimistic. 

Today we are raising funds for our dating service KeYou. For the last 3-5 years, the situation in dating has changed dramatically due to the emerging problem of loneliness. 

Centennials (generation Z) have recently outrun millennials (generation Y) to be called the most lonely generation. These results have been confirmed in the Cigna study that surveyed Americans aged from 18 to 22. 

Experts referred to the level of loneliness in Americans as "epidemic". 61% of Americans feel lonely. This number grew 7% (year-to-year) in 2019. Where we will be by the end of 2020 can be predicted considering the coronavirus outbreak. It is highly likely that  "Social distancing" and "Self-isolation" will become the words of the year. 

All mentioned above gives a fresh look at the dating industry, with new trends emerging during the coronavirus outbreak. At that time you either dated online or did not date at all. 

Coronavirus positive impact

An increasing trend for the time spent in dating apps (10 hours per week) has started even before the coronavirus. 

Today, people can learn even much more about each other in virtual space compared to an in-person date. To find a partner is already not a goal, but the process of communication and socializing per se.

One of the consequences of this trend is pretty much visible in Tinder. Many users there have no intention to date but just boost their self-esteem via increasing the number of matches. As for Bumble, there is an option to find a friend. That is precisely how user usage time has dramatically increased. 

Nowadays, the dating industry grows not only by time spent in apps but also by the product life cycle, revenue, number of market players, personnel hired, technical complexity, etc. Coronavirus has just accelerated this trend. 

It is worth noting that CAC (Customer Acquisition Cost) has significantly dropped during the pandemic (as we observed for absolutely different industries). Price per install for gay millenials in KeYou decreased 3-5 times compared to pre-COVID times. 

User acquisition channels have always been expensive. Paid traffic is still one of the major costs for dating service today. 

Rising prices for the paid user acquisition channels can be attributed to a relatively low level of technical innovations in dating. Despite continuous development and new products released regularly, new dating apps just slightly differ from already existing ones. 

The number of market players keeps growing as the entry barriers are quite low, and the popularity of dating services is increasing. The users themselves download new apps in hope of trying something new. 

"Dating fatigue" phenomenon is largely responsible for such an outcome. It implies endless dating without seeing each other in person and taking any responsibilities, while many people seek meaningful relationships. As a result, specific user behavioral patterns are formed, allowing, for example, Facebook to set quite high prices for its ads network.

In this case, virality becomes the key to success in 2020. That is virality, American investors are asking about and considering a must among other team qualifications. 

Regardless of CAC, building positive unit economics is what matters. CAC for the real estate market is even higher. It, however, does not prevent developers from getting high profits. 

For the last 5 years, an average subscription price in dating has increased, resulting in overall higher revenues across the industry. At the same time, the number of paying users has also increased. Consequently, the dating market features examples of building positive unit economics. 

Positive unit economics has been largely boosted by the coronavirus outbreak. It had created a new reality when all the dating went online due to self-isolation. While for other countries this process was managed by the authorities, in the US it was all about fear. All of a sudden, many people who never used online dating started exploring it. According to Hesam Hosseini, CEO at, lonely people started asking hundreds of questions to navigate through dating apps. To help those users, even launched a hotline. 

In the US, people who primarily used speed dating and special events (2.5% market share, according to some experts) to find a partner, started drifting towards online dating. Moreover, online dating also attracted those people who hadn’t succeeded in overcoming relationship hardships due to quarantine and had chosen to divorce. According to some experts, conditions to divorce were much more "favorable" during the COVID-19 outbreak when compared to prior economic crises. Some American law firms marked a 30-45% increase in divorce cases. 

From one-night stand to deep emotional connection

All the events outlined above have sparked activity in dating services. For instance, Match Group reported a 20% increase in the number of dialogs initiated. Other holding's dating apps (Plenty of Fish, Hinge, and others) marked a 30% increase in overall user activity in March 2020. Three billion swipes were made by Tinder users on March 29, 2020, thus a new record was set. 

Not only users online activity has changed, but their goals as well. COVID-19 has minimized hookup (one-night stand). When everyone is staying home, it simply does not make sense. Add to it the frustration caused by what was going on. That is why users started looking for a deeper emotional connection with potential partners. OKCupid reported a 5% increase in users seeking long-term relationships. In contrast, the share of users interested in an one-night stand dropped by 20%. These trends were primarily attributed to the fact that lonely people experienced higher levels of anxiety and boredom while staying at home. Seeking emotional relief, they attacked dating apps for chatting and new friends. 

For instance, to meet users' demands on entertainment, Tinder made “Passport” feature (looking for a partner abroad) free. Thus, people separated by thousands of miles have been matched. From my point of view, this solution is quite discussional in terms of the efficiency of finding a partner. That is, your match feed is filled with the people you almost have no chance to meet in person. Thus, it is yet another step towards hookup, actively promoted by a given dating service. 

Ask on a Virtual Date

Video calls implementation has become a mainstream trend everywhere. Meet Group holding (owns MeetMe, service featuring video calls and video streaming) has literally boomed during the pandemic. While all these features were implemented before the outbreak, the number of monthly active users (MAU) in April 2020 reached 2.9 million, demonstrating 31.4% growth. Moreover, the number of daily active users (DAU) hit 593K (+40.5%), and revenue jumped by 76.4% (!). Finally, all the figures above were just for App Store. 

Other services were forced to reconsider their roadmaps to introduce video calls sooner (in KeYou, dating app for gay millennials, we also added this feature). For instance, only 6% of Tinder users were interested in this feature before the pandemic. This number jumped to 69% during the pandemic. 

At the same time new reality brought to existence yet another cybersecurity issue. That is to make ever-growing traffic secure enough to minimize hackers' chances to disrupt communication and compromise users' video stream. 

The notion of virtual dates itself has broadened. OKCupid surveyed its users to get hints about an ideal virtual date. With over a million respondents, "creating common playlist", "crossword solving", "watching the old concert on YouTube", and "watching TikTok to understand youngsters better” topped the list. 

Whatever virtual dates are, it is absolutely clear that people seeking the partner and familiar with virtual dates will continue using this feature. It gives a chance to realize whether the potential partner is worth spending time, money, and effort and meeting in person. 

As I mentioned earlier, virtual dates, in general, serve to establish an emotional connection. OKCupid's own research has shown that 85% of users from a total of 70K preferred to develop an emotional connection with the potential partner prior to meeting in person. Moreover, users have less distracting factors while staying at home and thus have a chance to know each other better. As a result, when it comes to a real date, the emotional connection will be way more deeper. Video call serves as an intermediate stage between texting and live dating. 

There are about 8000 dating services worldwide. Many of them are truly out-of-date and it’s difficult for them to adapt to a new reality. Thus, it is highly likely for some old market players to disappear and new ones to emerge (our own experience of implementing video calls required team effort and expertise).

With video calls gaining popularity, cybersecurity issues emerge. Virtual dates contain a lot of sensible private info that may cause innumerable troubles if leaked. This could be a reason why dating industry players were not scared at all when Facebook entered the market. After the Cambridge Analytica data scandal, many users are concerned about entrusting their private data to the IT giant. Moreover, while gets 95% of revenue from paid subscriptions, Facebook capitalizes on ads and selling data. It is highly likely for users to put personal data safety first. 

Coronavirus pandemic has hardly pushed the dating industry transformation. Nowadays, online dating lies at the intersection of several industries.  

To conclude, I would like to mention that with new features implemented, dating services are drifting to social networks and entertainment platforms. That is exactly why we have introduced a new notion, Datertainment. From the past to nowadays the approach has radically changed. Previously, users signed up dating apps to find a partner and then find ways to entertain each other.  Today, they join dating for entertainment and match other people through it. 

That is how completely new opportunities to realize the most ambitious ideas emerge. I strongly believe that today we are witnessing the rebirth of the dating industry. Those investors who catch the trend will be able to find a unicorn among online dating services.

25 views0 comments


Commenting has been turned off.
bottom of page