TREFIS - Oct 15 - In 2018, Facebook announced that it would launch a dating feature. Facebook has the benefit of a massive user base, and even a small percentage of its users adopting a new dating feature could catapult it to the lead position in this segment. However, the perception of Facebook's treatment of user privacy will act as a major deterrent for potential users. Facebook is no stranger to growing by acquisition, and Match Group looks like a great fit. Tinder represents an asset similar in quality and potential to WhatsApp which Facebook bought in 2014. As of 2018, the following is how Match Group's Key Metrics compared with Facebook:
- User base: 7.9M for Match Group vs 2.25B for Facebook
- Average Revenue per Users (ARPU): $220 for Match Group vs $24.8 for Facebook
- Revenues: $1.7B for Match Group vs $55.8B for Facebook
- Adj EBITDA: $654M for Match Group vs $34B for Facebook
- EBITDA/user: $83 for Match Group vs $15 for Facebook
Valuations: Standalone and that of the combined entity
For Match Group, we expect EV to be 9.2x the 2020 revenues of $2.5 billion. This translates into an implied enterprise value (EV) of $22.8B for the Match Group, and also represents an EV/EBITDA of 25.5x for the company.