The Unit Economics of Dating Apps (Part 1)
The Golden Formula for Scalable Growth.
It is time to dive into the most critical topic for any entrepreneur planning to launch a dating business: Money.
It is time to dive into the most critical topic for any entrepreneur planning to launch a dating business. Since many readers of this newsletter are also Skadate clients—who bought our engine and now want to grow their profits—this article is for you, too.
This post will give you a clear formula for growth. It will direct your efforts—and your hard-earned capital—toward the specific levers that lead to scalable revenue.
The Golden Formula of the Dating Business
Expected Income = (Number of New Buyers × LTV) – Marketing Costs
This formula calculates your expected income per unit of time—for example, per week. You spend money to acquire users; a percentage of them become buyers; those buyers generate a certain amount of cash over their “lifetime” in the app.
Naturally, we want Expected Income to be greater than zero. Otherwise, what is the point of spending more on advertising than you earn?
Of course, you may have to work “in the red” for a while. Uber burned cash for years before generating an operating profit. But if you want to build a scalable business, sooner or later you must reach a positive Expected Income. To scale, you need to increase marketing spend, and how can you increase spend if you have no profit?
Do not forget: we are talking about dating. The “virality” and “word-of-mouth” growth that everyone loves doesn’t work very well here. People rarely brag to their friends about the new dating app they just joined. So, one way or another, you will have to pay for new users. And it is much healthier to pay for them out of profits rather than borrowed funds.
Sure, there are VC investments, but investors are not fools. They won’t give money to a business that cannot generate profit. Yes, there are “Seed” stage investors when you just have a pile of dreams and maybe no product yet. But you will still have to spend that seed money on turning the startup into a business and getting your Expected Income above zero.
Let’s look at the formula components closer.
1. Marketing Costs
Let’s take a typical day. You spent $X on advertising today—for example, in Meta Ads (Facebook and Instagram) and Google Ads (Search Ads + Performance Max). As a result, Y people clicked on your banner.
That settles Marketing Costs. In reality, traffic acquisition is 70% of success, not 50%, for any dating app. I will dedicate a separate article to this topic later.
2. Number of First Sales
Some users will come from the ad to your listing in the App Store/Google Play. Some will download the app, some will finish registration, some will do something important inside (like liking another user or writing a message). And a very small fraction will buy and bring you revenue.
Essentially, users need to walk a specific “path of success” that leads them from registration to purchase. You can imagine this path as a bridge connecting the promises you made to people on the Instagram banner and your actual product, which must fulfill those promises.
The most important components of this path are Onboarding and Activation.
Onboarding: You likely understand this because everyone has flown on a plane. In dating apps, onboarding includes registration, filling out the profile, uploading photos, etc.
Activation: This is a newer concept. It essentially means the user received value from your product for the first time. In the case of a plane, it might be the first successful flight. In the case of Airbnb, the first successful booking.
This topic is critically important because this path leads your users to the purchase.
The Airline Analogy: In the case of flights, you are unlikely to change your mind about flying after buying the ticket or demand a refund (and as an airline, you basically earned the money the moment you sold the ticket).
The Dating Reality: In a dating app, users have 1,001 reasons to step off this successful path and never make a purchase.
And don’t forget the refund rate. This “path” deserves a whole cycle of articles where we will analyze the elements, the metrics we use to measure the stages, and the typical problems that force users to drop out halfway—or even earlier. Our task is to engineer a path that guides the user from registration to the first purchase, and from the first purchase to the maximum number of repeat purchases. In exchange, we must provide real value and utility to the user.
3. LTV (Lifetime Value)
Today, however, we will focus on LTV. Let’s go!
So, Y people clicked, Z people downloaded, registered, liked others, and someone got their first match. What happens next depends heavily on your app’s business model.
Pay-to-communicate: A requirement to buy a subscription to send an outgoing message.
Credits: Buying packs of credits for specific actions.
Freemium: The model used by all popular apps (Tinder, Hinge, Bumble, etc.).
The essence of the Freemium model is that the most important action—the ability to communicate with another person—is free. It’s true: if you match with someone on Tinder, you can chat for free. But if you are impatient, or a business person who values their time, you will buy a subscription to see who liked you.
By the way, have you noticed that Tinder doesn’t immediately show the people who liked you in your card stack? Do you know why? If not, definitely follow this newsletter—in the future, I will do a deconstruction of popular (and not so popular) dating apps to explain these mechanics.
Incidentally, apps where you must buy a subscription to start chatting still exist—for example, Seeking.com. And we won’t overlook the new class of dating apps where people talk to LLM bots, like EVA AI.
I have analyzed all these Business Models in detail in this article -
So, a user buys something in your app. Perhaps an impatient user wanted to see who liked them. Another user in a different app wanted to write a message. A third wanted to buy credits to unlock private photos. There is a huge variety of premium features hidden behind a Paywall.
A joyous event has occurred—a reward for all your long labor in launching and tuning your dating app: The user bought.
Now, a completely new stage in this user’s life begins. They finally get access to all paid features. By the way, some apps (and this is becoming a trend) are creating multiple subscription tiers: two or even three, like in Tinder (Plus, Gold, Platinum). This helps raise revenue, and we will discuss “tiers” in a separate article.
After the purchase, the user starts using your product to the fullest and extracting the value you built into the subscription.
The Lifespan Factor
Don’t forget that the user came to you with a specific goal. The classic case: a user looks for a partner. Ideally, they will stop using your app as soon as they find one. Therefore, such a user has an average “lifespan” in the app. The sum that one such user brings is what we call LTV (Lifetime Value).
This metric is calculated in dollars. It is one of the most important metrics for any business, online or offline. Imagine the LTV of a car manufacturer whose loyal customers might buy only that brand of car for their entire lives.
In our case:
LTV = ARPPU (Average Revenue Per Paying User) × Lifespan
This means: how much the user pays us on average per month, multiplied by the number of months until they stop making one-time purchases or cancel their subscription.
Industry Insight: In some dating niches, users return to the site to search for partners multiple times—or let’s say, much more often than in “Vanilla dating” (standard romance apps). This is common on sites like Seeking.com (the sugar daddy industry).
The conclusion is simple: the longer a user remains a paying user, the more you earn. Simple.
4. Why Users Leave (The LTV Killers)
It would be great if all users canceled subscriptions only after finding partners. The harsh truth is that there is a huge pile of other reasons why people stop paying you much earlier. We will analyze these reasons in the future, but here are a few examples.
The Cold Start Problem
You just launched your dating site, and you have very few users. A subscriber might quickly view all available users in a week and that’s it—there is no point in remaining on the site. They cancel.
Of course, you know where this problem comes from. Any dating app is essentially a marketplace with two sides: Demand and Supply. At launch, the sharpest problem is always the “Cold Start.”
I wrote a detailed guide on how to solve the Cold Start Problem here -
Scammers
Another reason why users either don’t buy at all or cancel immediately is scammers. There are many varieties of scammers in dating (I will write a separate article about them). But today, what matters is that they try to move communication off your site to an external platform (Telegram or WhatsApp) as quickly as possible.
The nuance: Scammers usually register as women.
The behavior: They usually write the first message.
All of this causes strong suspicion in most users, but unfortunately, some fall for it and become victims.
How does this affect LTV? Simple. People don’t trust a site where they meet scammers. They buy less. Also, a user might buy a subscription just to read a message from a girl, only to find out she is a scammer.
Guess what the user thinks? I’ll tell you a secret: users often think the site owners specifically created these profiles to force them to buy subscriptions. However, the harsh truth is that these scammers register themselves. Young sites that haven’t implemented protection tools like Photo or Liveness verification are especially vulnerable. I will definitely write a separate article on how to build such protection with minimal resources.
5. Refunds, Chargebacks, and VAMP
It is one thing if a user simply cancels. But some people demand a Refund.
The worst part isn’t that you lose the revenue—it’s that your app can be removed from the App Store. Apple automatically tracks the refund rate for your app, and if it goes over the limits, your app can simply be deleted.
Then there are payment gateways, which you connect to accept payments bypassing the App Store/Google Play (to lower the commission from 30% to 3-5% via a web app). Here we are talking about Chargeback Rate.
A chargeback is essentially when your user demands money back through their bank, not directly from you. If you have too many returns and your chargeback rate exceeds the limits, you can be banned from accepting card payments entirely.
The VAMP Warning
For example, Visa has a special monitoring program—VAMP (Visa Acquirer Monitoring Program)—which sets these limits.
From June 1, 2025, Visa began counting both chargebacks and fraud transactions in a single indicator, setting a new risk threshold of 2.2%.
From April 2026, they are lowering it to 1.5%.
Because of this, it is now much easier for dating site owners to fall into the “risk zone,” even if their chargebacks are within the normal range. I will write separately about VAMP and the upcoming limit changes in the future.
Did you know? Apple recently allowed developers in the US to accept credit cards directly inside apps. You can look at how this is implemented in Tinder, Hinge, and Bumble.
Conclusion
We have now dissected the LTV component of our core formula. We know how to calculate it, why it matters, and what kills it—from scammers and the “Cold Start” problem to technical threats like chargebacks.
But a high LTV is meaningless if you have zero users entering the funnel.
In the next article, we will tackle the second critical variable: Number of New Buyers. We will break down the exact path a user takes to become a customer—starting from your App Store or Google Play listing, moving through the onboarding process, and finally reaching that crucial first purchase.
Why Build From Scratch?
Maximizing LTV and fighting scammers is hard enough without having to code the entire platform yourself.
This is why we built Skadate.
We provide the complete technical engine—native apps, payments, and monetization—ready from Day 1. Ready to skip the development nightmare?
You focus on finding the users; we’ll make sure the technology keeps them there.