The boss of extra-marital affairs dating website Ashley Madison said that “female equality” is behind its “exponential growth” because it has led to an increase in “appetite” from women to cheat on their partners.
In fact, Ashley Madison is growing so rapidly that it is looking to launch an IPO in London imminently
so it can raise £135 million ($US200 million) to fuel an even bigger expansion. It already claims to be the second-largest dating website in the world, just behind Match.com. It launched in 2001 and now has 36 million members in 46 countries.
“We’re seeing a big rise from the Jewish world, arranged marriage world in India, as well as Asia. In the Latin world, we’re seeing strong growth in Brazil, such as Sao Paolo, and we’re increasing membership in Mexico,” said Noel Biderman, who is the CEO of Avid Life Media which owns Ashley Madison as well as a range of other niche dating websites, to Business Insider in a telephone interview.
In 2014, it had $US115 million (£76 million) in sales, which is almost a fourfold increase since 2009. This is largely pegged to a growth in female users, according to Biderman. He said that revenue is projected to reach over $US150 million (£99 million) over the next year or so, as membership from culturally conservative parts of the world are surging.
“I don’t see an appetite for unfaithfulness waning around the world,” Biderman said. “Women are getting greater equality and are generally getting married later than those in two or three generations ago. They are now more willing to put their marriage at risk. That’s only going to increase because economic conditions for women are better and it gives them more choice.”
only charges male members, which account for 70% of membership globally, to meet married women. It’s free to sign up, but if you want to meet people, you have to buy packets of “credits” to hook up with another person on the site.
One credit entitles you to meet with one other person. The packages range from the introductory range of 100 credits at $US49 (£32) to the “affair guarantee” package, which has 1000 credits, costing $US275 (£181).
It doesn’t charge women but they would have to pay a fee of around $US17 (£11) to erase their profiles entirely. Now that there are more women on the platform, it is providing more chances for men to match with other women on the site.
“Planting your flag in controversy”
Ashley Madison is targeting 50-60% of its sales to come from Asia by 2020. Japan, which has a low divorce rate compared to the US (four cases out of 1,000 people) versus about two cases per 1,000 people, is a huge growth market.
Also, as of the end of February, South Korea struck down a decades-old law banning adultery, meaning that the market became wide open for Ashley Madison.
“I think as an entrepreneur it’s important to plant your flag in controversy,” said Biderman.
“You see what happened in South Korea when they changed their adultery laws. Anywhere with pent up demand is great for business. Condom manufacturers rushed in as business will grow. Traditional companies rather just wait and see and let people like us test the market. But that’s fine being the only game in town.”
Why Ashley Madison is looking to launch in London
Ashley Madison’s growth story has been charted for the last five or six years and it even tried to to launch an IPO in Toronto, but it failed following a lack of investor demand.
It is now touting business in Europe ahead of its proposed London IPO because, effectively, the continent and Britain’s capital in particular is openly more liberal when it comes adultery.
Biderman told us that the group’s plan to launch an IPO is “out of the infancy stage” and its waiting to hear back from “two to three stock brokers and investment banks” over whether they would like to get on board with the listing.
“We’re unique because any individual investor on the street understands what we are and how we generate business. People are unfaithful and we charge for them to communicate with one another. There is appetite from people to be part of it. People don’t question investing McDonald’s which sells unhealthy food or advertising companies that may represent some companies you don’t agree with,” said Biderman.
He also believes that, as long as women become more “empowered” and laws against adultery are nullified, then there will always be decent returns for investors.
“If you’re looking at us from an investment point of view, you’ll see that our core market isn’t going to change in growth. It’s based on human conditions [to cheat] which could be anyone from Presidents, royalty, athletes, actors, your neighbour or even your co-worker,” said Biderman.
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