REUTERS – Aug 17 – Zoosk recently hired Deutsche Bank to help it raise $50 – $75M. The new financing will help Zoosk pay for more marketing and international expansion. Zoosk operates a dating community of more than 50M users in 60 countries and it recently extended a TV ad campaign from the US into the UK and Canada. Zoosk closed a $30M round of funding in late 2009, bringing total financing at that time to $40.5M.
by Alistair Barr
See full article at Reuters
Is anybody going to talk about how much cash they’re burning through? We started Global Personals with no outside investment, using just out credit cards and have already topped $50m/year run rate – Zoosk has got to start delivering genuine operating profit. The level of existing investment is huge, they’re burning through cash by the sounds of it.
Is anybody going to talk about how much cash they’re burning through? We started Global Personals with no outside investment, using just out credit cards and have already topped $50m/year run rate – Zoosk has got to start delivering genuine operating profit. The level of existing investment is huge, they’re burning through cash by the sounds of it.
You raise a ton of VC cash to burn through it, grow like crazy & then double down by raising more. Investors/founders hope the cycle continues until the company can file for an IPO; at that point profits are more relevant.
When you raise as much as Zoosk has, and given their size, the mentality is clearly to go BIG or go home. Risky, yes. Potentially very rewarding, absolutely. Suffice it to say they’re swinging for the fences.
Ross, what you’ve accomplished bootstrapping WLD is both amazing & inspiring. Kudos also go out to Date.com, ChristianCafe, PofF & other successful dating companies that never took venture funding. Zoosk took a different path, but what they’ve accomplished thus far is equally impressive, even if the profits are low or non-existent. We’ll see how the rest of the story plays out…
You raise a ton of VC cash to burn through it, grow like crazy & then double down by raising more. Investors/founders hope the cycle continues until the company can file for an IPO; at that point profits are more relevant.
When you raise as much as Zoosk has, and given their size, the mentality is clearly to go BIG or go home. Risky, yes. Potentially very rewarding, absolutely. Suffice it to say they’re swinging for the fences.
Ross, what you’ve accomplished bootstrapping WLD is both amazing & inspiring. Kudos also go out to Date.com, ChristianCafe, PofF & other successful dating companies that never took venture funding. Zoosk took a different path, but what they’ve accomplished thus far is equally impressive, even if the profits are low or non-existent. We’ll see how the rest of the story plays out…
Hey Said,
I agree with you – I guess where I’m coming from is simply concern over a high profile failure in our category. It’s very easy to spend money and buy members, it’s more difficult to monetise them over the long term and it’s pretty much impossible to understand lifetime (18 months plus) value of members from a particular acquisition source when growing so quickly.
I wish Zoosk well and hopes their risky approach will pay off – but if it doesn’t, investors may be more wary of the category as whole.
Will be interesting to watch!!
Ross
Hey Said,
I agree with you – I guess where I’m coming from is simply concern over a high profile failure in our category. It’s very easy to spend money and buy members, it’s more difficult to monetise them over the long term and it’s pretty much impossible to understand lifetime (18 months plus) value of members from a particular acquisition source when growing so quickly.
I wish Zoosk well and hopes their risky approach will pay off – but if it doesn’t, investors may be more wary of the category as whole.
Will be interesting to watch!!
Ross
I hear you Ross.
In general I think investors are weary of this space. You’ve probably heard the gripes; it’s not viral enough, you have to spend lots of money to get users, activity levels/engagement is low, the churn is high, blah blah blah. The fact that the dating industry has a track record with tangible business metrics often works against us when raising money and in our valuations b/c we can’t sell pies in the sky; something that VC’s dream of & often invest in. That said, it’s good seeing a recent uptick in dating startups being funded.
In any case, I’m a big fan of the industry and welcome investment opportunities from dating startups. Ping me if you’re one of them and want to pitch.
I hear you Ross.
In general I think investors are weary of this space. You’ve probably heard the gripes; it’s not viral enough, you have to spend lots of money to get users, activity levels/engagement is low, the churn is high, blah blah blah. The fact that the dating industry has a track record with tangible business metrics often works against us when raising money and in our valuations b/c we can’t sell pies in the sky; something that VC’s dream of & often invest in. That said, it’s good seeing a recent uptick in dating startups being funded.
In any case, I’m a big fan of the industry and welcome investment opportunities from dating startups. Ping me if you’re one of them and want to pitch.