Coming off a 23% year-over-year global revenue jump to over $667 million in the first quarter, dating site company Match Group has acquired Hyperconnect, a South Korea-based video technology company, for $1.725 billion. Match paid 50% in cash and 50% in company stock.
Adding Hyperconnect’s social discovery feature “really increases the market we can go after, and creates even more growth opportunities around the world,” Match CFO Gary Swidler told CNBC Thursday.
Before the acquisition, Match solely addressed the singles market. With the acquisition, Match, which owns Tinder, Hinge and other dating apps, will be able to connect users looking for romantic relationships as well as friends and interest groups.
"Hyperconnect's forward-looking technology has already forged new ways for the next generation to make friends and engage with new people, regardless of borders and language barriers," Match CEO Shar Dubey said in a statement. "Our immediate goal is to accelerate Hyperconnect's growth, while deploying their technology across our portfolio, helping to ensure people around the world have access to the best products to meet new people, and create joyful connections."
“We're thrilled to start capturing the huge synergy potential between Hyperconnect and Match Group's portfolio of world-class brands," Hyperconnect CEO Sam Ahn added. "We see clear pathways to turbocharge Hyperconnect's growth while adding value to Match Group through our unique technology."
The pandemic helped position Match for the acquisition by bringing substantial returns to the dating app space, said Swidler, who serves as COO in addition to CFO.
Match Group, which went public in 2015, also saw the average subscriber base across its dating apps increased by 12%, the company shared in a May letter to shareholders. Tinder alone grew 18% year-over-year.
“The online communities are just burgeoning,” Swidler said. “They're growing significantly. And we're the best in the world at connecting people who don't know each other for different purposes. [The acquisition] creates a massive opportunity for us.”
Match is a primarily subscription-based company, unlike Hyperconnect, which focuses more on cards and consumable products. Going forward, the joint company will mix subscription and consumables.
“We were heading that way anyway,” Swidler said. “And as we expand in Asia, where the market is a little bit less typically focused on subscription and more focus on consumables, this plays right into the growth opportunity for us."