For Tinder, the past few months have been far from the “summer of love‘ the company hoped to see.
A recent series of product missteps has hampered Tinder’s revenue growth business, sparking an uproar within the company’s leadership, Match Group CEO Bernard Kim said during a meeting with investors Wednesday morning.
Tinder CEO Renate Nyborg has left her position after being employed for less than a year, Match announced in his Q2 shareholder letter Tuesday evening. While the company searches for her replacement, a team of Match executives will run the day-to-day business.
“Tinder has not delivered on its product roadmap for the first half of the year,” Kim, who has only been on the job for 63 days, said during the conference call. Those shortcomings will apparently delay some initiatives that the company had planned for Q3 and Q4.
“Tinder usually works on major initiatives in the first half of the year that manifest in payer and revenue growth in the second half of the year,” Kim said. “But that didn’t happen this time, so we don’t expect the same sales increase that we normally see.”
Match Group expects revenue between $790 million and $800 million today, well below Wall Street’s expectations. Shares fell more than 20% on the report, and the company’s earnings call seemed to have little to appease investors.
Kim joined Match Group as CEO at the end of May, replacing Shar Dubey. Before that, he was president of the gaming company Zynga since 2016.
Match Group has increased its focus on product innovation across its portfolio companies since the COVID-19 pandemic showed that dating apps were necessary to evolve beyond the one-dimensional ‘swipe right’ model. Users felt more comfortable with digital dating during the pandemic as they spent so much time online, and companies like Tinder added a whole host of new social elements, such as video and gaming. Kim’s appointment had signaled that the company was looking for further growth in that digital space.
Now, along with the executive shake-up, Kim is also drastically scaling back the company’s metaverse ambitions. In its earnings report for last year’s third quarter, it detailed lofty goals for building out dating in the virtual world. The idea was that Match would take advantage of its $1.7 billion acquisition of Hyperconnect, a South Korean social media company focused on video and AI products.
Less than a year later, Kim said he told the Hyperconnect team to slow down his metaverse ambitions.
“Given the uncertainty about the final contours of the metaverse and what will or won’t work, as well as the more challenging work environment, I have instructed the Hyperconnect team to iterate, but not invest heavily in metaverse at this time,” Kim said. in the shareholder letter.
He is 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 can also be purchased à la cart with fiat currency.
Kim said that Tinder Coins have shown mixed results so far, leading to the reversal.
“I like the idea of virtual goods and currency on Tinder, but I don’t think it’s been approached in a completely logical way,” Kim said during the conference call. “For example, [in] my experience with gaming demand for virtual goods and collectibles is rolled out first, and then you launch these items later.”