eHarmony – Profile
HQ: Pasadena, CA
Management: Founder is relationship ‘expert’ Dr. Neil Clark Warren. Through his self-help books and TV bookings, Dr. Warren has married science with marriage producing the patented ’29 Dimension of Compatibility.’ CEO Greg Forgatch married the eldest daughter of Dr. Neil Clark.
Investors: In December 2004, eHarmony raised $110M from 14 investors including Sequoia Capital and Technology Crossover Ventures.
Business Model: Online Matchmaking. eHarmony charges more for its service — about $50 a month versus the industry standard of $20 — but converts registered members to full-time subscribers at a rate that’s six to 10 times the industry average, according to the company. The service has 6 million registered members. Company has done a good job with partnerships: Friendster, Gannet, AARP, and now has a lot of marketing bucks to drive traffic but is still a few rungs down from the top in the edating game.
Competitors: www.match.com, true.com, date.com, kiss.com, dreamdates.com, udate.com, matchmaker.com.
Dirt: $110M seems like silly money given that online dating accounted for less than $500M in spending in 2004, the category’s growth has been slowing and Match.com, canceled an initial public offering this year, citing weak demand for shares. Nonetheless, we are impressed with eHarmony’s hucksterism – only Dr. Phil does it better. The company takes credit for 10K marriages and wants to track to 100K in 2005 – it has paid a bunch of PhDs to ‘study’ its method. The company’s snake oil should be strong enough to last through an IPO and a lock-out period, then look out.