Several years ago I met Christian and (at the time) Redg at Skout, think it was iDate. After talking to them a while I wanted to help them out with fundraising, so I went to the usual suspects and sat in on some investor meetings on Skout’s behalf. Nobody was interested, most investors (that I know anyway), were either already invested in mobile apps, or sitting back and cooling their heels to see how things in the location-based discovery/dating market panned out. Skout also had too many business models at the time, and the tons of young kids and spam turned some investors off completely.
What a difference a few years makes. Skout has refocused the app on a new demographic: young people who wanted to meet strangers and singles who wanted to flirt.
Skout was popular enough early on to take advantage of much cheaper customer acquisition costs, and is currently singing up one million new members each month.
In a story on TechCrunch, its mentioned that Skout has a healthy revenue stream from in-app purchases. Users can pay for points to send virtual gifts, see who is viewing their profile and send wink bombs.
Skout co-founder Christian Wiklund says they have cleaned up the service, removing 40,000 devices a month to keep existing members happy and spam-free.
To keep the engine going, Skout is raising $22 million in a round led by Andreessen Horowitz. Thats Marc Andreessen, the guy who invented the web browser, and who also invested in Foursquare and many other huge Internet startups.
With the funding, Skout plans to find a new office that will hold 120 people and focus on scaling the service.
I love it when capable entrepreneurs keep chipping away at an idea over time, making mistakes, learning from them, pivoting when required, and having the tenacity to round up a huge pile of cash from A-list investors. Huge win for Skout, and the entire dating industry should benefit as investors continue to warm up to casual, social, mobile, location-based dating apps.
Note that HowAboutWe raised $15 million last year. What did Skout say to investors to get such a big investment? Probably the fact that Skout is much larger than HAW and its often easier to ask people for money with in-app purchasing than it is subscriptions, just ask Badoo.
Looks like paying for credit-based features on dating sites is back with a vengeance after networks like Spring Street abandoned the practice years ago.
Badoo has tons of money in the bank and now Skout steps up to the plate. The battle for the casual dating is on, although I think Badoo will take the 30 and up crowd and Skout will split up the youngsters with a handful of other apps. Who else is doing casual dating at this scale?