Samwer brothers’ eDarling – reports of failed exit “completely wrong”2012-05-14 6
In 2010, online dating leader eHarmony bought a 30 per cent stake in rival eDarling – built with the backing of Berlin’s Samwer brothers – for an undisclosed sum. Industry sources now claim plans for a full exit to eHarmony are off the table. eDarling itself says that infomation is “completely wrong” and there were no such sales negotiations underway.
The Samwer brothers – Oliver, Alexander and Marc – have made a name for themselves by successfully building copies of US digital businesses in new markets. Sometimes, this success comes by selling back to the “originals”. In 2010, for example, the Samwers sold copycat CityDeal to rival Groupon for $126 million.
There’s speculation eDarling’s founders (pictured) hope to exit in a similar way. Such plans may be off the table for now. FOCUS magazine, citing industry sources, claims eHarmony is unwilling to pay a required high double-digit million price for eDarling because that company is still making losses.
But eDarling head of corporate communications Dr Jan-Pierre Richter said this morning such reports were “completely wrong”. eDarling is speaking to its lawyers and will be asking FOCUS to publish a counter statement. And the relationship with eHarmony? “Great,” Richter said. “They’re very happy with developments.” According to Richter, eDarling has no plans so far for an exit.
The Samwer brothers’ incubator Rocket Internet held 33 per cent of eDarling as of April 2011, with eHarmony in second place with 30 per cent. Other major shareholders included Holtzbrinck Ventures, Mediengruppe Pressedruck and IBB Beteiligungsgesellschaft at eight per cent each. Co-founder Christian Vollmann held nine per cent; co-founders Lukas Brosseder and David Khalil less than one per cent each.
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A few weeks ago, Affinitas, the company managing eDarling, reported a €13.6 million loss for the 2010 year. It’s just three years since eDarling started up, so that loss is not unusual, especially given eDarling’s quick expansion into France, Italy, Netherlands, Austria, Poland, Russia, Sweden, Switzerland, Spain and Turkey. The company now claims 250 employees and about 12 million members.
According to a press release just out today (midday), eDarling expects a slight positive result in 2012 with sales revenue up 30 per cent on last year.
Last year, eDarling founders Brosseder, Khalil, Vollmann and Kai Rieke (now Project A) also set up spin-off platform Better Date – different from eDarling and eHarmony in that it focuses more on users actively selecting possible partners rather than matchmaking through profiling and algorithms.
Meanwhile, US-based eHarmony, which also operates in Australia, Canada, the UK and Brazil, is estimated to have brought in $300m in 2011. The site’s success is apparently due to its conversion of active members to paying subscribers – at a rate of 24 per cent, apparently three times the industry average.
There are some signs the online dating industry in Europe is not performing as well as expected despite, or possibly because of, a growing number of players in the market. European leader Meetic’s sales dropped 11 per cent in the first quarter of 2012, thanks to a 13 per cent decrease in subscribers. Late last year, German player Parship failed to sell - again, apparently because bidders were unwilling to pay the desired price.
In a bid to strengthen relationships with customers, the four big German dating platforms eDarling, FriendScout24, Neu.de and Parship last week signed up to new consumer-friendly industry code SPIN. The new code is open to all companies that offer fee-based services for online dating.
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