Match Group, the parent company of popular dating app Tinder, says it is cutting funding for Web3-related research and development amid disappointing Q2 earnings and the departure of Tinder’s current CEO.
In a letter to shareholders on Tuesday, Match Group CEO Bernard Kim revealed that it will be scaling back its metaverse investments as well as scrapping plans to release an in-app digital currency called Tinder Coins.
The move also comes alongside the resignation of Tinder CEO Renate Nyborg, the company’s first female CEO, that had initially set out plans to introduce the “Tinderverse” after acquiring a video-AI and augmented reality company called Hyperconnect in 2021.
Nyborg had planned for Hyperconnect to further develop its avatar-based “Single Town” experience as a way for Tinder users to meet and interact with one another in virtual spaces in the future.
While Kim did not explicitly state the reasons for Nyborg’s departure, he highlighted that Tinder “has not been able to realize the monetization success that we typically deliver” throughout the past few quarters.
In his letter, Kim said that Match Group would continue to watch the Metaverse space but would prefer to wait for the “appropriate time:”
“I believe a Metaverse dating experience is important to capture the next generation of users […] However, given uncertainty about the ultimate contours of the Metaverse and what will or won’t work […] I’ve instructed the Hyperconnect team to iterate but not invest heavily in [the] Metaverse at this time.”
Kim went on to disclose that plans to release an in-app digital currency, Tinder Coins, had also been scrapped due to “mixed results” from testing:
“After seeing mixed results from testing Tinder Coins, we’ve decided to take a step back and re-examine that initiative so that it can more effectively contribute to Tinder’s revenue.”
“We also intend to do more thinking about virtual goods to ensure that they can be a real driver for Tinder’s next leg of growth and help us unlock the untapped power users on the platform,” he added.
“We’ll continue to evaluate this space carefully, and we will consider moving forward at the appropriate time when we have more clarity on the overall opportunity and feel we have a service that is well-positioned to succeed.”
The company reported a 12% year-on-year growth in total revenue in Q2 2022, reaching $795 million, alongside a $10 million operating loss due to impairments relating to its Hyperconnect acquisition.
Match Group stock is down 11.39% over the last five days to $63.24 at the time of writing.