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(Bloomberg) -- Match Group Inc. said it will acquire South Korean video technology company Hyperconnect for $1.73 billion in cash and stock to help expand online dating and social features on its apps.
Since the coronavirus pandemic has all but ended in-person socializing, Match has been adding tools like video and streaming to its family of dating apps, the biggest of which is Tinder. Seoul-based Hyperconnect has two flagship apps, Azar -- a live video and audio chat app with features including instant voice and text translation -- and Hakuna Live, a social streaming app that enables group audio and video broadcasting and offers paid features, including virtual gifting, the ability to find people nearby and augmented reality-powered avatars.
“As more of our lives move online, people are looking for richer and deeper experiences,” said Match Chief Executive Officer Shar Dubey, in a statement Tuesday. “Hyperconnect’s live video and audio engagement technology is a powerful tool that enables users to connect with new people and cultures on a global basis.”
The deal gives Match the option to pay a mix of 50% in cash and 50% in newly issued shares or fully in cash at the close, which is expected in the second quarter. The purchase price assumes Hyperconnect is debt free at the completion of the transaction. Match shares jumped as much as 9.2% Wednesday in New York to a record intraday high of $173.47. They have gained 12% this year.
Match has been seeing an increasing proportion of growth come from international markets, particularly in Asia. The Dallas-based company has been working to reduce social stigmas that can be associated with online dating in non-western markets and has been emphasizing the social aspects of its apps for more than purely romantic interests.
Hyperconnect is profitable and generated more than $200 million in revenue in 2020, a 50% increase from 2019, the company said. It gets over 75% of revenue from markets across Asia and both apps have a highly developed monetization strategy, where paid-for perks account for the bulk of sales, compared with the more subscription-dependent model at Match’s properties. Since its launch in 2014, Azar has garnered more than 540 million downloads, while Hakuna Live, which debuted in 2019, has been downloaded more than 23 million times. Hyperconnect has 400 employees based primarily in Seoul and is led by its CEO and co-founder Sam Ahn.
(Updates share price in fourth paragraph.)
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