Romance is alive and well — and it’s starting to become lucrative for dating startup Zoosk.
The San Francisco startup said that it’s current sales rate adds up to more than $90 million per year, an increase of more than 250 percent from a year ago. (Presumably, Zoosk is sharing its current “run rate” rather than the amount it earned last year, because the newer numbers are more impressive.)
Zoosk says it has more than 60 million registered users, and it points to comScore data showing the site placing number one or two (depending on the month) among the United States’ “personals” websites. 12.2 million of those users are active on the site in a given month, but that doesn’t count everyone who comes in through the iPhone and Android apps released last year, or the Zoosk Messenger desktop application, which is also new.
One factor in that growth has been Zoosk’s television ads, like the one below (which, coincidentally, briefly features a magazine that I contributed to).
Zoosk is vying for the number one spot with Match.com. Co-founder and co-chief executive Alex Mehr said the showdown between Match and Zoosk is like a repeat of the battle between Monster.com and LinkedIn to become the site where you find a job. The older, more established services (Monster and Match) are basically “bulletin boards,” he said, while Zoosk is trying to build a real “social graph” through dating, where you can interact with the people you’re interested in and add them as friends.
“We can’t kill them and they can’t kill us … but we really believe that we are going to win,” Mehr said.
Match recently acquired another dating site, OkCupid, but Mehr said he doesn’t consider OkCupid a competitor since it’s free (the free and paid online dating worlds are separate, he said), and he added that he’s skeptical that OkCupid will be doing much innovation in the future.
As for Zoosk, the site makes most of its money from premium subscriptions — users can join, browse, and send a limited number of messages for free, but they have to subscribe if they want full access. They can also purchase virtual currency to buy virtual gifts.
Zoosk has raised $40.5 million in funding from Canaan Partners, ATA Ventures, and Bessemer Venture Partners. Mehr said the company is around “cash flow neutral.”