MTCH LONG THESIS | DECK & REPLAY: CLICK HERE
KEY POINTS
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FB MAY ALREADY BE AT A DISADVANTAGE: As we mentioned during our call last week, the biggest impediment to broader adoption of online dating is its stigma. FB may be at an even greater disadvantage there. The survey below suggests those willing to try FB's upcoming dating service is lower than that of those willing to use an online dating service in general. We believe this is due to either FB's perceived data protection issues and/or user hesitation to commingle their online dating and social media worlds. We suspect it's more the latter given the sudden surge in non-FB sign-ups on Tinder, which occurred shortly after users were given the option to do so and well before the Cambridge Analytica news broke. Either way, this survey is not central to our long thesis since Tinder offers a unique use case that FB probably can't replicate (no, we don't mean a hook-up app).
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THESIS SUMMARY: FB gave us an entry point on a name that just kept running away from us. MTCH is the industry leader in the dating space with a portfolio of +40 brands. Most of its business is concentrated around a few brands, particularly Tinder, which may have already achieved escape velocity in terms of its scale, and is also a gamechanger from a monetization perspective. Further, we expect the online dating industry to expand given both emerging and continuing demographic tailwinds that should collectively increase the lifetime value of MTCH's user base. Granted, we're not saying that FB isn't a risk, just not to the extent that many would suspect, especially considering that FB doesn't plan to charge for its dating service.
See the first two sections of the deck/replay above for our analysis on MTCH and the Online Dating Industry. We address the FB risk in the last section. Please let us know if you have any follow-up questions or would like to discuss in more detail.
