The online dating industry is a well populated sector, filled with startups and long-running firms that are looking to capitalise on modern romance.
In July, Real Business spoke to Ross Williams, the founder 12-year-old business Venntro Media. Not only is the the company a veteran in its field, Venntro is one of the UK’s fastest growing companies among all sectors, boasting a 45.51 per cent CAGR and a revenue approaching £50m.
With the business model firmly in place, Venntro monetises through a combination of cross-selling, advertising and subscriptions, but the main win is its White Label Dating service which provides the framework for third party dating sites.
With new players arriving in the sector on a regular basis – some of which are acquired by Venntro to enhance its portfolio – Happn entered the scene in January 2014.
While Tinder connects users based on yes or no swipes, Happn works with a location-based principle that connects to people they’ve actually passed on the street.
The app was launched by French entrepreneur Didier Rappaport, but why did he want to enter a competitive market that’s already so congested?
“We saw an opportunity for a new concept that brings value to the people. Looking at dating website history, it’s extremely virtual. We thought about meeting people and that’s very much here and now, so real life is at the heart of Happn’s concept,” Rappaport told Real Business.
“Today we grow at around one million new users per month, and that shows people really feel something when they go to Happn and see the timeline of people they’ve encountered. It’s a new concept and brings the real world to the virtual dating industry.”
With the user base in mind, the firm has now topped 6.5m users and is on course to reach ten million by the end of the year.
Happn isn’t Rappaport’s first venture. He was the co-founder and COO of video site Dailymotion, which launched back in 2005, and said that his experience has been an asset when getting his new startup off the ground.
“I’ve done so many mistakes in my professional life that many won’t be repeated. When I started Happn I knew I had to provide users with an excellent pain-free service and monetise from day one – not to find them after months of existence,” he explained.
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Rival dating app Tinder, for example, started operating in August 2012 but the free app didn’t truly start concentrating on revenue for a couple of years.
With an estimated 50m users, Tinder finally looked to capitalise on them with the introduction of Tinder Plus, which unlocks enhanced features for a fee, in March 2015.
By comparison, Happn had a freemium model in place from the beginning.
The trend is common in mobile games and Rappaport believed the “disruptive business model” would be a success compared to the traditional subscription-based effort that has been found in the dating sector previously.
It means Happn can be used for free, but access to extra features such as charms, one of which allows sending of music via Spotify, can be bought and used for a charge – similar to Tinder Plus – in attempt to woo love interests.
Interestingly, the charges only apply to male users, however.
“In the beginning, the industry was like that. I would like to say it’s the French way of love – the men pay and women are invited. In fact, it was an easy choice,” Rappaport explained.
“If I had to do it today maybe I would change it because equality is very important – but sometimes, even the women that love equality also like to be charmed by people who have made some effort.”
Continue reading to find out why Rappaport isn’t concerned about an exit strategy, how the new investment will take the business forward and why there’s no fear where rivals are concerned.
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