Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Dating apps seem a little lovelorn. Last year marked the lowest number of downloads in four years, according to data from Sensor Tower. That decline is dragging on market values. Bumble’s share price has dropped 70 per cent since it listed in early 2021. Over the same period, Chinese social media company Hello Group, which owns dating site Tantan, is down 64 per cent. Match Group, owner of Tinder and Hinge, has fallen 83 per cent.

The odds of a near-term turnaround are slim. On Monday, Bumble founder and chief executive Whitney Wolfe Herd declared she was stepping down as CEO, replaced by Slack CEO Lidiane Jones. Bumble says this is an opportunity for investment in new tech such as artificial intelligence. But there is no proof that AI gimmicks will increase paying users.

Founded in 2014, Bumble set itself apart by giving women the ability to message first. It is the second most used dating app in the US but has never approached Tinder’s popularity. Hinge, which focuses on relationships, presents a new threat. In the last quarter it reported a 44 per cent increase in revenue on the previous year, more than twice the pace of Bumble’s growth.

Herd’s departure comes six months after Bumble president Tariq Shaukat announced his own departure. Investor Blackstone is also stepping back. It remains the biggest shareholder but its stake has dropped from 46 per cent to 27 per cent over the past two years, according to S&P Global data.

On the plus side, free cash flow rose 28 per cent in the first six months of the year. Bumble has the means to invest in new ideas. It should prioritise enticing paying users to part with more money. Revenue per paying user dropped 3 per cent in the last quarter. If Bumble is going to invest in AI, it needs to find tools that users are willing to pay for.