Dating app Zoosk drops IPO plans

Breaking up is hard to do with public investors.

But online dating platform Zoosk is withdrawing its plans for an initial public offering, citing "unfavorable market conditions."

In a statement Friday, Zoosk CEO Kelly Steckelberg emphasized that subscription businesses have suffered, specifically highlighting companies such as Angie's List and, whose shares have dropped hard in the past 12 months.

Zoosk isn't the online dating business making headlines: There are now reports that Grindr, the dating app for gay men, is seeking a buyer.

The Zoosk App on Android Wear
Source: Zoosk
The Zoosk App on Android Wear

It's no surprise that dating sites could pique the interest of some investors. This is a wildly popular industry. More than 41 million people Americans visited an online dating service in March, according to comScore. That was a 13 percent jump from March 2014. (Tweet This.)

However, the $2.4 billion dating market is fiercely competitive, and one where monetization can be difficult because so many users don't want to pay for these services. The industry is growing revenues at about 5 percent per year, according to industry research firm IBISWorld.

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"There are many competitors so it's hard to price the services aggressively," said Britanny Carter, an analyst at IBISWorld who studies the market. "Sites like and eHarmony target users who are looking for relationships, and they're willing to pay more for that. But that's different than Tinder, which is perceived as a site for casual dating."

Right now, the dominant player in the industry remains InterActiveCorp, which controls 22 percent of the market, according to IBISWorld. The company's most prominent websites include and IAC also owns a majority stake in Tinder.

This year, IAC's dating service in the U.S. is expected to generate $523 million in revenue, an increase of 4.3 percent.

The next biggest player in the market is eHarmony, which was founded in 2000 and now commands 14 percent of the industry. The matchmaking service targets women and focuses on the high-end dating market. The site is estimated to generate $325 million in sales this year, a jump of nearly 5 percent.

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Nearly 4,000 businesses are involved in matchmaking. The number of available apps also continues to expand, with a range of choices for those searching online for romance.

For example, there's happn, a dating app that shows potential matches. Here is how it works: Every time you cross paths with another happn member, whether that's on the street, at a party or bar, their profile shows up on your timeline.

Happn, founded in 2014 in Paris, now has 750,000 daily active users.

And coming soon is Wingman, which is referred to as the "Tinder of the skies" and launches this summer. It's a free iPhone app that promises to connect users with people at the airport or on their flights.

Analysts believe the dating service industry will continue to benefit from rising demand in the next five years. They point to the growing number of households with access to the Internet, rising smartphone adoption and the fading social stigma of looking for love online.