For Tinder, these last few months have been a far cry from the “summer of love” the company was hoping to see.
A recent slate of product missteps have hampered Tinder’s revenue growth operations, leading to a shakeup within the company’s leadership, Match Group CEO Bernard Kim said on a call Wednesday morning with investors.
Tinder CEO Renate Nyborg has exited her position after less than a year on the job, Match announced in its Q2 shareholder letter Tuesday afternoon. While the company searches for her replacement, a team of Match executives will manage day-to-day operations.
“Tinder did not deliver on its product roadmap for the first half of the year,” Kim, who is himself just 63 days into the job, said on the conference call. Those shortcomings will apparently delay a number of initiatives the company had planned for Q3 and Q4.
“Typically, Tinder works on big initiatives on the first half of the year that materialize in payer and revenue growth in the second half of the year,” Kim said. “But that didn’t happen this time around, so we don’t expect the same revenue bump that we typically see.”
Match Group today is anticipating revenue between $790 million to $800 million, trailing well below Wall Street’s expectations. Shares plunged more than 20% on the report, and the company’s earnings call appeared to do little to appease investors.
Kim joined Match Group as CEO at the end of May, replacing Shar Dubey. Previously, he had been president of the gaming company Zynga since 2016.
Match Group has increased its focus on product innovation within its portfolio companies since the COVID-19 pandemic showed that dating apps needed to evolve beyond the one-dimensional “swipe right” model. Users became more comfortable with digital dating during the pandemic since they were spending so much time online, and companies like Tinder added a slew of new social elements, such as video and gaming. Kim’s hire had signaled the company was looking for further growth in that digital space.
Now, along with the executive shakeup, Kim is also dramatically scaling back the company’s metaverse ambitions. In its third-quarter earnings report last year, Match detailed lofty goals to build out dating in the virtual world. The idea was that Match would leverage its $1.7 billion acquisition of Hyperconnect, a South Korean social media company that focuses on video and AI products.
Less than a year later, Kim said he’s told the Hyperconnect team to slow down on its metaverse ambitions.
“Given uncertainty about the ultimate contours of the metaverse and what will or won’t work, as well as the more challenging operating environment, I’ve instructed the Hyperconnect team to iterate but not invest heavily in metaverse at this time,” Kim said in the shareholder letter.
He’s also reevaluating Tinder Coins, a virtual currency the company was testing and planned to launch globally this summer. Tinder had hoped that the coins could be distributed to users who remained active on the platform. They could also be purchased à la carte with fiat currency.
Kim said Tinder Coins have shown mixed results so far, leading to the reversal.
“I love the idea of virtual goods and currency at Tinder, but I believe it hasn’t been approached in a completely logical way,” Kim said on the conference call. “For instance, [in] my experience in gaming, demand for virtual goods and collectibles are rolled out first, and then you launch these items later.”