Zodier seeks to disrupt $3.7 billion online dating game
The multi-billion dollar world of online dating hasn’t changed much since the days of users downloading an app and then filling out forms about themselves in order to find love. For the younger generations, it is a bifurcation; they want direct plug-and-play access from their favorite online platforms because love isn’t necessarily the first thing on their minds.
It was a problem that startup Zodier looked into and found a solution for: dating within existing messaging and social media services like Facebook, Instagram, Telegram, and Viber. It was a more user-friendly model with greater appeal to an “I want it now” mindset.
At least that’s the theory that Zodier founders, CEO Matvey Gramovich and CTO Slava Kalevich, of Belarusian origin, relied on to launch the project and expand it around the world. “The data suggests that of those who would be willing to look for a date online, about half, or the equivalent of 300 million people, are tired of installing an app, and Zodier solves that problem,” Gramovich said. .
This universe of potential clients is attractive enough for six angel investors to join us. Most prominent is Yauheni Tamashevich, CEO and founder of SpurIT, a company that provides e-commerce development, marketing and customer support; as well as serial digital entrepreneur Dimitri Mikhalchuk who also serves as Chief Investment Officer at Zodier.
Along with other funding, the company – now largely relocated to Poland with UK ownership through Noirix Technologies – has so far raised around $800,000, with another $1.5 million being sought. The value of the online dating cake is projected, by Statista, to reach $3.7 billion this year, and have a compound annual growth rate of more than 6% through 2026.
It is estimated that more than $800 million of 2022 revenue will come from the United States alone, a market that exploded during the 2020 pandemic lockdown with a growth of 18% in terms of smartphone dating app users according to eMarketer. Dating apps like Match.com, eHarmony
Grindr and Bumble benefited, but that rate of growth was never going to last after the pandemic.
Nonetheless, global user penetration from 5.4% in 2022 is expected to grow to 6.4% by 2026, and if chatbot services in the messenger kick off, they could help increase that percentage. However, dating startups like Zodier are up against some heavy hitters.
Fortunately, in technology, market share is not a barrier to entry, because a good idea can change everything, and quickly. At Ukrainian software development and support company KeyUA, Chief Technology Officer Andrey Onopriyenko commented in a blog post: “While it might seem like there is no chance to beat the with a brand new product, that’s not true. Modern dating apps lack advanced features such as AI-based matchmaking, self-learning UX technologies, gamification and others. There are many opportunities to create a product with competitive advantages.
Zodier thinks it’s in that exact space. Launched in October 2020, the company managed to grow the number of users to 2.6 million people and found the Asia-Pacific market to be particularly receptive. The company is now targeting the United States where it claims to be the first to receive approval on Instagram’s chatbot platform to provide dating services.
Zodier essentially works like Tinder: users “like” or “dislike” other users’ photos. Thus, the conversation can only take place between two people who are interested in each other. The technology behind the chat is where Zodier thinks it has the upper hand. One of its advantages is to offer cross-platform functionality so that users of different social networks can find each other in its online dating service.
The chatbot also has some basic matchmaking skills: it can determine compatibility based on date of birth, age, and location, for example. These might be raw metrics, but they are a starting point and they also ensure genuine and real user verification. “We basically make online dating simple by using an intuitive, user-friendly interface,” Gramovich said. “We think dating, messengers and chatbots are a perfect match.”
Growing fast, but can it last?
Kalevich said, “Zodier had 10,000 users in its first two weeks and we only spent $1,000 on promotion. Now we have over 2.6 million registrations. We plan to grow to five million users and $100,000 in revenue per month. To date, we have not seen any other online dating project growing so rapidly in this already crowded market.
Zodier told me that as a very young company, it was “too early” to talk about revenue, but from a profitability perspective, the owners are looking to break even by “ beginning of 2023”. The team seems convinced that its formula can disrupt the market.
The company’s patent-pending technology uses a proprietary, high-load algorithm that claims to be “the largest chatbot-based dating app despite a few companies trying to copy our model,” according to Gramovich.
The founders also believe that their service has taken quickly because their marketing strategy was tighter. “Usually dating apps buy social media ads. Someone sees an ad, installs an app, then starts using it,” the CEO said. “Zodier buys Facebook ads, someone sees those ads and starts using the product. By removing a step in the sales funnel, we’ve dramatically lowered the cost of signing up.”
Conversion is also likely to be higher. According to Zodier, people open and read an average of 80% of messages in messengers, while push notifications in mobile apps are only opened and read 7-8% of the time.
These are key considerations for a startup. “Low transactions cost time and money,” Gramovich said. “In mobile applications, the commission on sales in the Apple Store and Google Play reaches 30%. Zodier’s standard expenses are 3% commission from bank payment systems. »
The company’s initial strategy was to build a large community of over a million active users, before starting to charge monthly subscriptions or one-time upfront fees. But with the economic and geopolitical climate worsening, Zodier advanced his plans to stabilize the business.
“To monetize Zodier, we use the ‘freemium’ model, like most of our competitors. The service is free, but there are fees for additional features that make the service’s job even easier. However, it turns out that cultural quirks mean that one size doesn’t fit all. “We see that different regions need new ways to monetize. For example, we’re growing exponentially in Indonesia, but subscriptions aren’t doing well there. Instead, we try to monetize through advertising and one-time payments,” Gramovich said.
This is similar to the model used by Amazon
From Eastern Europe to Asia and beyond
Initially, the Zodier chatbot only worked in Telegram and attracted many users from Eastern Europe. The team continued to test their product in different countries. The big surprise for them was the explosive user growth in Indonesia and other Asian countries. Today, 70% of Zodier’s total users are Asian, with 70% of its audience up to 25 years old and a male/female ratio of almost 50/50.
“In Indonesia, there were up to 20,000 registrations a day. To be honest, we are always pleasantly surprised why people use our service so actively. We are seeing a high conversion rate from ad to signup (20%). Also, there is good virality – people are sharing information about Zodier on their messengers. When these users find our dating service, it’s something new for them and it sticks,” Gramovich said.
“Our ambitions extend to the whole world. In the near future, we plan to enter the Indian market with a chatbot in Telegram. We are also creating a chatbot for Viber for Eastern European users and another for Line and KakaoTalk for Japan, Malaysia, Thailand and Singapore. However, we are now mainly focusing on the US and European markets. We just launched a chatbot on facebook messenger and we plan to monetize it by the end of the year,” Gramovich said.