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A Foolish Take: The U.S. Dating App Market Is Peaking

Leo Sun, The Motley Fool

Online dating apps, led by Match Group's (NASDAQ: MTCH) Tinder, surged in popularity in recent years. However, the market's growth will decelerate over the next three years, according to projections from eMarketer, as fewer new users sign up and users drift between existing apps.

Chart showing projected year-over-year growth in U.S. dating app users.
Chart showing projected year-over-year growth in U.S. dating app users.

Data source: eMarketer. Chart by author.

That sounds like bad news for Match, which owned four of the top five dating apps for U.S. millennials (Tinder, Match, OKCupid, and POF) last year, according to eMarketer. However, the online dating giant is preparing for that slowdown with three key strategies: increasing its revenue per subscriber with new premium tiers, acquiring niche challengers like Hinge, and expanding into overseas markets.

Match's premium tiers for Tinder, Tinder Plus and Tinder Gold, let users use unlimited swipes, undo swipes, promote their profiles, and more. The company also recently restructured its leadership team to prioritize its growth in Asian markets. These moves are paying off, and Wall Street expects its revenue to rise 16.5% this year.

That represents a deceleration from previous years, but Match still has irons in the fire with growth opportunities beyond America. The U.S. market for dating apps may be maturing, but the major players still have room to grow.

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Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Match Group. The Motley Fool has a disclosure policy.