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These companies are making big bucks off Americans' quest to find love

It may seem like everyone is looking for love online, but out of the 600 million internet-connected singles in the world, 400 million have never tried a dating product.
Image: A couple embrace at s subway station in Bedford-Stuyvesant, Brooklyn, on May 16, 2013.
A couple embrace at s subway station in Bedford-Stuyvesant, Brooklyn, on May 16, 2013.Spencer Platt / Getty Images file

Love is not just a game for two. It’s also a billion-dollar industry with plenty of untapped market potential as the boldfaced names — and niche upstart dating apps — continue to make a play for new users. But it can also be a business nightmare.

Just in time for Valentine’s Day, dating app Coffee Meets Bagel let users know that it suffered a data breach that exposed private information from some users. Hackers were able to access a partial list of user information, including names and passwords prior to May 2018.

Ashley Madison, the dating website for people looking to have an extramarital affair, was notoriously breached in 2015 and exposed the personal information of as many as 37 million users, many of whom had joined the site hoping to remain anonymous, for obvious reasons. Ashley Madison’s parent company ultimately settled a class action lawsuit for $11.2 million in 2017.

But dating app users in search of everything from a hook-up to a spouse, are swiping, scrolling, liking — and, in many cases, purchasing in-app upgrades — and have made the search for love into a market that is projected to be worth $3.2 billion by 2020, according to market research estimates.

And there’s plenty more of the market these apps are hoping to win.

“Out of the more than 600 million internet-connected singles in the world, a whopping 400 million people have never even tried a dating product,” Mandy Ginsberg, CEO of Match Group, which owns Tinder, OKCupid and several other dating apps, said during the company’s earnings call last week.

Match Group has the biggest stake in the dating game. The company reported $457 million in revenue for the fourth quarter of 2018, up from $379 million the same time last year. Tinder, one of the stars of its portfolio, added 233,000 new members over the holiday period, further fueling the expansion of the global dating empire.

But Match is also diversifying its portfolio of dating apps to make sure it has something for everyone, or even multiple apps for the same dater looking to try his or her luck. Match completed its acquisition of the relationship-focused Hinge earlier this month for an undisclosed sum.

“While Tinder rightly gets most of the spotlight, we have a number of other brands that are poised for impressive growth and serve a different demographic or psychographic than Tinder," said Ginsberg. "Hinge, which has seen accelerated growth under our leadership, is a differentiated product that has clear momentum and should turn into another star."

Hinge profiles show photos and answers to three icebreaker questions. A prospective match chooses a photo or an answer to like. The other person is then shown the person who liked them and can choose whether to match or not. Once matches are connected, they can set a date and also let Hinge know they met, so the algorithm gets a better idea of who is compatible with whom.

Meanwhile, Bumble, another massive, privately held competitor, has focused on healthy relationships, safety, and empowering women to “make the first move.”

A Bumble representative said the app has more than 50 million users. However, Bumble serves multiple purposes for many users, who can swipe for dates, use Bumble BFF to meet new female friends, or find a new business connection on Bumble Bizz.

Coffee Meets Bagel differentiates itself with a smart algorithm that curates “only quality matches, so singles can spend less time swiping.” Every day at 12 p.m., the app sends users a limited number of potential partners, called bagels, which they can then choose to match with. If it's mutual, the pair can then start chatting and set a date.

Special features, including activity reports and read receipts also help members figure out who is actively engaging on the site versus wasting their time. The app’s founders famously turned down a $30 million offer from billionaire Mark Cuban on “Shark Tank.” While the site declined to disclose its number of subscribers, a representative said Coffee Meets Bagel has made more than 50 million matches.

"When we ask our paying users why they paid, they often say that it’s because they really enjoyed the free version and thought if they pay, they would get even more results. Our goal is to continue to elevate our product such that it’s a dating app that our customers are happy to pay for," co-founder and co-Chief Executive Officer Dawoon Kang told NBC News.

"Oh, and to clarify, it doesn’t mean that we are trying to get loved by everyone," she said. "Our target customers are a very specific segment of singles — those who are looking for connections that are real, authentic, and add meaning to their lives."

Then there are niche apps that help connect people with the exact suitors they’re looking for, whether it’s religion, ethnicity, shared hobbies, physical characteristics and kinks.

Match’s most recent launch, Ship, is an app that lets users’ friends — or even their parents — swipe for them and find them dates. The company also owns OurTime, an app geared toward seniors looking for love.

Outside of the Match realm, there are plenty of others, including GROWLr, for gay men; Feeld, which caters to threesomes; JSwipe, an app targeted at Jewish singles; and MouseMingle for Disney fans.

Kenji Yamazaki co-founded East Meets East, a dating app for singles with Asian heritage, in 2014. The app has attracted more than $4 million in venture funding from Silicon Valley and now has more than half a million users in the United States, Yamazaki said.

Despite the ever-increasing competition in the dating business, he’s about to launch another dating venture that he hopes will have mainstream success. His next app is called “Quiz Date Live” and launched in time for Valentine’s Day. It’s a mix of “The Bachelor” and “HQ Trivia” in an app.

The idea behind Quiz Date Live balances both the human desire to find love and the tremendous appetite people have for watching other people find a suitor on reality shows. The app will connect a single man or woman with potential partners, who then compete for a date, as viewers watch, by answering quiz questions that determine who is the most eligible and will ultimately win a luxury date. What’s at stake? A helicopter ride over Manhattan or a Michelin dining experience, among other glamorous opportunities, said Yamazaki.

“Swiping is so daunting. That’s why we decided to try something new — we really want to bring back the fun into dating, while also using the latest technology that keeps people engaged,” Yamazaki told NBC News. “Whether they want to admit it or not, I’m sure everyone has wanted to be part of a TV dating game show at some point. We simply made that possible in app form.”