Tinder Users Are Paying For Tinder Plus

IAC/InterActiveCorp's IACI fiercely popular dating app Tinder recently went from being free-to-download and free-to-use, to offering differentiated services for paying and non-paying users.

Non-paying users now have a limited amount of "likes." However, those paying for Tinder Plus have unlimited "likes," can connect with people from other cities and can undo "likes." While the changes generated dissatisfaction among many users and fans, Tinder Plus seems to be catching on.

In a recently published report, Victor Anthony, Senior Analyst of Internet Media at Axiom Capital Management, revealed that the firm has seen "numerous instances of users in the U.S., who are over 30 years of age, paying for Tinder Plus. Users over the age of 30 pay $19.99 per month for the ability to search in other geographies (essentially all over the world), and to undo swipes. Younger users pay $9.99."

Related Link: Yes, There's A Way To Invest In Tinder

The analyst highlighted that, although they cannot determine how many users have signed up for Tinder Plus, or if they will keep on paying for it, they can say that "this evidence does refute the most bearish cases that say Tinder users are unlikely to pay for the service. And it also says that older users are willing to pay for what we thought was a surprisingly high price point. And that's important because it confirms what IAC has been saying all along, that in their tests, power users will pay."
However, Axiom Capital still believes that the high price point will have to be cut down in order for the service to gain widespread appeal.

Nonetheless, the analysts are "optimistic that monetization will work well on recurring subscriptions and on advertising." They estimate that Tinder could generate nearly $90 million in EBITDA in 2016, which, at a 15x multiple, would value the site at $1.3 billion.

Shares of IAC recently traded at $68.98, up about 1 percent.

image credit: Tinder