Online dating firm Venntro Media Group on how to win a new user every three seconds
12 min read
31 July 2015
The online dating world is home to the likes of Match, Tinder and Plenty of Fish, but Venntro Media Group CEO Ross Williams explains to Real Business exactly how his firm, which has a new love-seeking member sign up every three seconds, is keeping the competition at bay.
The British company’s growth was proven in Real Business’ Hot 100 2015, which revealed Venntro has achieved a compound annual growth rate of 45.51 per cent over three years, while its revenue has reached £42.2m.
It’s impressive, but considerably more so when you factor in that, by today’s standards, the online dating market was almost non-existent when Williams opened for business in 2003. Under the roof of Venntro lives DatingAgency.com and DatingRepublic.com, among other dating sites – which we’ll come to later.
However, the real moneymaker for the firm is its White Label Dating division, which acts as something of an engine room for third parties. The platform is responsible for powering 25,000 sites, providing the infrastructure for dating networks owned by firms including London Evening Standard, Bauer, Dennis Publishing, and Smooth Radio.
Talking about how the internet was very different in the beginning, Williams discussed how the concept came about. “I thought it was a great idea and a big opportunity to take a white label approach to online dating – it was something I was passionate about and enjoyed,” he said.
Part of that belief was a result of being a self-confessed nerd while at university, Williams recalled.
“It was early days back in 2003 and dating sites were in the minority and nowhere near as commonplace as they are today. I knew the internet would be the future, and it made sense meeting people online – even in 2003. I was a geek at university and talked to people in chatrooms on the network, which I thought it would be the next big thing.
“I had no idea it would be as large as it is now, but I got in early and I’ve been doing it since, and we’re now the largest privately-owned online dating company in Europe. We’re behind 25,000 sites and a new member joins every three seconds, so our competitors are who else our customers may be going to join.”
The conversation turned to rivals, which is an interesting conundrum for Venntro, given that it is both a B2C and B2B operation. Williams revealed that the Match Group, which is the home of Match.com, Tinder and, more recently, Plenty of Fish, is its biggest rival.
That said, the Venntro boss was keen to distinguish itself from Match and highlighted two key differentiators.
“Predominately our revenue comes from White Label Dating, which does the work behind scenes – Match doesn’t do that,” he said, comparing its model to that of the type of business supplying Sainsbury’s with own-branded cornflakes.
He continued: “Additionally, our model is around cross-selling members from one brand to another. You might join Just Singles and get an offer to join Smooch, but Match doesn’t cross-sell as well as we do. So we generate more revenue per member.”
Indeed, with revenue pushing increasingly closer to £50m, Venntro makes a profit from subscriptions, augmenting them with revenue from adverts and paid-for extras, where 50p or £1 can be paid for extra functionality.
12 years on from the beginning, Williams explained that the rise of mobiles has been the biggest change to the business and noted that the iPhone, which launched in 2007, changed everything. In fact, more people have visited Venntro properties via mobile than desktop over the past two years, which he attributed to the flexibility of being able to access and speak to people whether you’re on the train or on the bus.
“Before, when you wouldn’t have been able to use dating on mobile, the last thing people would want to do is jump on a computer after being one all day at work,” he explained.
As such, mobile is a key area of focus for the company’s future efforts, which has been demonstrated with the arrival of Jiko. Williams described it as “Tinder for thinking people, with more thought behind it”, while the soon-to-launch app Revealr puts security front and centre by allowing users to reveal as much or as little personal information as they like.
In terms of adoption barriers to online dating, security is certainly one of them, with people fearing they’ll be stalked. Williams opined that dating online is actually more secure than meeting someone on a night out, however.
“There is lots of security in place that protects privacy. With any dating site, we’ve got the user’s name and credit card information – I don’t know how many bars have that, so it’s easier to identify people online,” he said.
“It’s inevitable that there will be the good, bad and the ugly of society – but that happens everywhere. We have a free 0800 number people can call in and ask questions on, 24/7.”
He added that each and every profile and photo is checked by moderators in the Windsor office, with people there on hand 365 days a year at all hours. And, of course, Venntro expects customers to use common sense too.
Continue reading on the next page to discover how the US and mobile will support Venntro’s entry into the Hot 100 2016, and why Williams believes entrepreneurs have too much focus on winning finance.
With the company growing at a rapid rate, in addition to mobile, it’s the US expansion that has helped Venntro achieve further scale. Williams said that a number of partners wanted to launch there, thus America was tapped into once there was enough demand.
“The beauty of online dating is that if you’re in Boston, you don’t need members in Chicago,” he detailed. “It’s a very geographic business, so we can launch in key geographies without worrying about logistics and operations.”
It has also been propelled somewhat this year with bank debt financing, which saw the acquisition of Revealr. There were also others in the pipeline, which would be been “for a couple of million [pounds]” but Williams admitted the team decided against them.
Instead, the firm is biding its time, admitting that there are lots of online dating deals available on the market, but few buyers, which puts Williams and company in a powerful position.
In terms of what’s required from a company hoping to be acquired, he said it must have a good product and brand proposition, solid tech and ideally be mobile-first. Ultimately, Williams is looking for something with the means to appeal to its 45 million members, which is why the company opened a ventures arm three months ago.
“There are often good ideas that struggle to get scale, but we can take that and bring scale. The role of the venture arm is to take a minority investment of 30-40 per cent, in turn for providing the business with access to our database, tech and scale, and that’s quite interesting,” he said.
“The easiest way to make a success of any app targeting consumers is getting scale, which is often expensive, but the beauty is we can team entrepreneurs and provide the funding.”
One thing that’s of particular interest, which solidifies just how powerful Venntro is, can be demonstrated by the fact Williams met his fiancée – and so did his business partner – by dating through the company.
“We used our product and we know our product. Is the head chef at restaurant going to be a veggie? Probably not. I’ve heard of competitors where the board members have never used their product, which is ridiculous,” he declared.
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“We know the value of love. It’s the thing people can say is expensive and on average you’ll spend £1 a day – but if it works then it’s the best pound you’ll have ever spent. People might spend two or three pounds a day on a coffee, so it’s fairly good value.”
In order to secure its place on the Hot 100 in 2016, Williams said continued growth overseas will drive the numbers. Meanwhile, mobile apps, where people pay less for items, are viewed as a volume play to reach mass users.
Elsewhere, Venntro is also toying with wearables and has been testing on the Apple Watch, enabling the means to vibrate if a potential partner is nearby, with the means to swipe according to preference.
“The future is definitely mobile going mainstream, but wearables are interesting. They can continue with you as part of normal life, but getting right use case on wearables is key as it brings online dating wherever you are,” he said.
The Venntro Foundation, meanwhile, is an area of the business that gives back to local causes, and Williams revealed it generates a really good engagement among staff and has donated more than £120,000.
And in a bid to encourage money-hungry entrepreneurs that it’s not all about finance, Williams closed by saying: “There’s too much focus on money and not getting out there and hustling a bit. We’re a £45m business. We got started with half a dozen credit cards, and didn’t know what angel investors or VCs were then – not everyone needs external investment to make it work.”