Last fortnight, BharatMatrimony posted record growth in profit, with more than 30% growth from last year, and adding 210K subscriptions.

Building a Profile

The year was 1997.

Murugavel Janakiraman, a young man hailing from a small town in Tamil Nadu, was working as a consultant in the United States. Starting out, he did not think he had it in him to be a skilled programmer, but here he was, with job offers from around the world.

And now he knew that he wanted to make something for the next big thing: the internet.

Trying to find offerings for Indians settled abroad, he gained inspiration from sites like samachar.com and rediff.com, and was convinced that he had a starting point. He would make something for a group of people he was most familiar with -  the Tamil community.

In just a few days, Mr. Janakiraman had sysindia.com up and running. On sysindia.com, one could look up the Tamil calendar for festivals and upon registering their email address, they could choose which festivals to get email reminders for. One could even use sysindia to book tickets back to India.

Other features included a Tamil greeting cards section, and more importantly a matrimonial service.

For the next two and a half years, Janakiraman would single handedly manage the traffic on sysindia along with his day job. He enjoyed the hobby, but he couldn’t have fathomed how big a change in his life, both personal and professional, this website was going to bring. 

One fine day, Janakiraman decided to put his own profile on sysindia’s matrimonial service. As fate would have it, he found a match! The man who reached out to him for his horoscope is now his father-in-law. 

Before dogfooding was cool, Mr. Janakiraman bet his life on it. 

Making the First Move

It took Mr. Janakiraman his own matrimony to the potential of sysindia’s “feature”

It had more users leveraging the matrimonial service to find suitable matches, than any other service offered by it. That was his undeniable Eureka moment, and the push he needed to build an exclusive matrimonial site.

Like any founder who sets out to build X but sees one “tiny” feature of X, Y, as the real deal, he began. He focused again on a demographic he understood. 

Born and brought up in Royapuram, a locality in Tamil Nadu which had a sizable part of the population from the Telugu community, he set up a matrimonial service for the Tamil and Telugu communities.

He named this service BharatMatrimony.com.

At the time, India’s internet penetration stood at 0.5%. Every user who did have the privilege of the internet used a dial-up connection. Starting a website as a business trying to digitize an offline experience wasn’t foolshardy, it was crazy.

But this very internet would drive the financial markets into a craze, and then a meltdown.

In the year 2000, as bad (or good?) luck would have it, the internet fuelled global recession put Janakiraman out of his day job. 

But now, Bharat Matrimony was not just the community portal it used to be, and a determined Janakiraman returned to India to set up an office for this quickly growing service.

His first employee was a gold medallist from the University of Madras. The pricing for a customer till they found a partner was Rs. 300, if they were based in India and $10, if they were based in the United States.

And just like that, Bharat Matrimony was in business.

It’s a Match!

By 2004, Janakiraman’s team, albeit small, was making profits. 

In the same year, they were approached by a celebrated investment group, but Janakiraman was reluctant to take in outside capital, believing that BharatMatrimony was growing organically.

As Janakiraman’s most popular service was gaining traction, so were its competitors. 

Around this time, Shaadi.com announced a partnership with Yahoo! to launch India Matrimony, 

a services channel aimed to become a one-stop-shop for everything related to the Big Fat Indian wedding. 

This was during a time where Yahoo! and Rediff were the two search engines that all vertical websites in India relied on. 

The two horses in matchmaking that started in exactly the same year were running head to head.

Knowing that this partnership would lock Bharat Matrimony out of the Yahoo! traffic, Janakiraman went straight for the other channel. 

He met with Ajit Balakrishnan to propose a partnership with Rediff, but they were unable to meet halfway and there was no deal.

Janakiraman was keen on retaining his independence, because he had other plans for his venture.

That plan involved even potentially taking on Rediff. 

He had been following the American media and internet company InterActiveCorp, and taking from its series of acquisitions, he decided that diversifying to form a network of websites was the way to go.

Eating Into a Buffet 

With no inspiration in the Indian market, BharatMatrimony went into its own version of a conglomerate. 

At its core, the idea was to leverage the traffic, users and trust it already had to upsell and cross-sell more services. Even today, this is perhaps the most regularly employed revenue (or valuation) expansion strategy. 

Whether or not it works is a different strategy. 

Eyeing the job and property markets, he launched clickjobs.com in 2005 and indiaproperty.com the next year. 

Indialist.com, dubbed the Indian Craigslist, and indiaautomobile.com followed.

By now, a lot of companies had survived the dot-com crash, and with many of his competitors across different verticals announcing capital injections by investors, Janakiraman knew that it was time to raise capital.

Finding the right investor was a task, at a time when India probably had 0 VC firms. Janakiraman and team went through a lot of proposals that did not materialize, before they got a call from investment bankers that they would be meeting with Yahoo!.

Fairly perplexed and partially convinced that nothing would come out of it, Janakiraman did end up meeting the people from Yahoo! eventually, at the request of the bankers.

The result of the meeting would be Yahoo!’s first investment in India. Yahoo! Unceremoniously dumped Shaadi.com as its exclusive partner, bringing Bharat Matrimony on board.

2006 would be the watershed year for Bharat Matrimony, giving it a leg up against competition.

Matrimony.com raised ~$450K in capital between 2006-2008 from venture investors, equivalent to a $1.5M seed round today. 

Crazy Rich Indians

Having started multiple portals, they would meet with limited or no success.

The company’s diversification into property and auto portals would be dead at the start, with brand conflict. It wouldn’t result in upsell or cross-sell, but rather just a stretch of resources. 

On the other hand, expansion in the core business would continue to bear riches. 

Though it started as an online matchmaking platform, it was quick to realise the suboptimal level of digital penetration in the late 2000's. 

Furthermore, Indian matchmaking is (in)famous for heavy involvement of parents. This means that the target customer of Matrimony.com was not particularly tech savvy and preferred a touch-and-feel process involving the assistance of a person they can trust.

It launched BharatMatrimony centres, which would function as marriage bureaus for its customers who preferred the offline mode. outlets pan-India ranging from Telugu Matrimony to Gujarat Matrimony. 

Company adopted an innovative approach to get around the issue of limited usage of digital payments. It hired community engagement managers who would go door to door for collections.  

Matrimony.com was following the OMO – offline merge online – trend long before it became popular. Strong data analytics backed the online channels of mobile and website to unlock value from the large amounts of user traffic.

2010 onwards, it started launching a range of customised services, such as Elite Matrimony for exclusive guided matchmaking for premium customers and Community Matrimony containing over 300 exclusive community sites.

The decision to have a largely fragmented ‘community’ based model would turn out to be an inspired, and data driven one.

Matrimony.com correctly realised that 95% of Indians get married within their own community, and to be able to ease the offline to online transition, they would have to give their customers a look and feel that felt like home.

In a similar way to large consumer goods (P&G) or luxury fashion brands that operate as a house of brands with distinct customer relationships, Matrimony.com structured their company in a way that allowed them to have 300 hyper-local sub-brands despite being a nationwide powerhouse.

As it ended 2014, it would hit INR 200+ Cr revenue, unimaginable for a website in India. Unlike the newbies called Flipkart and Ola on the block, it was even turning a profit. 

Like 2006 almost a decade ago, the next few years would mark a turning point.

Band Baajaa Baaraat

In 2015, Matrimony.com forayed into the $50b+ wedding services market. 

It launched professional services such as photography, decoration and wedding venues.

Using an asset-light approach, it tied up with multiple vendors across India to bring these services to its customers. It now became a one stop solution for matrimony services.

Given the attractiveness of the marriage market, it was no surprise that many other online matchmaking sites had sprung up. However, Matrimony.com was the undisputed market leader in the space. 

In 2016, there were ~63mn people actively seeking for a match. 10% of them used online matrimony services and a massive 50%, i.e. 3.4mn users, had active profiles on Matrimony.com. 

A decade after it raised its first round of financing, it did something that Indian internet companies dream of the most. No, it’s not becoming a unicorn. 

It’s becoming a public company.

Matrimony would end up being one of the first few, rarified Indian internet companies to go public. It would debut in 2017 at a 2,000 Cr market cap, making its founder one of the wealthiest Indian entrepreneurs.

By then, it had more than double the number of unique visitors on site compared to the next matchmaking site. Besides greater volume, users were more engaged on Matrimony.com spending 5 min/ day on avg versus 2 minutes / day on other similar sites

To understand why Matrimony had become an attractive, public company, one would need to understand its model.

Churning Through Profiles

Matchmaking is a lucrative business, but it also a unique twist that could kill most businesses.

Matchmaking is one where ‘success’ of the service leads to customer churn.

Think about more traditional marketplaces like Ola, Flipkart or Dunzo. When these services provide top quality customer satisfaction (efficient rider/driver matches, quick delivery, safe packaging), customers are happy and use the service more.

This leads to word-of-mouth customer growth, higher GOV (gross order value), and improved unit economics.

Compare that to Matrimony.com, where success, paradoxically, is linked to losing the customer (matching 2 users perfectly so that they stop using the service).

This idiosyncrasy flips typical retention metrics on their head and encourages even more competition on the top of the funnel because the battle is won or lost at the customer acquisition stage rather than the retention stage.

It is also why, for a long time, prominent VCs shirked away from matchmaking apps/sites as they got comfortable with the idea that churn… could be good!

But the flipside of this high churn, is the incredibly high average ticket size one user is willing to pay. As this is a decision of a “lifetime” the lifetime value of a customer, even though its for a short period, can be very high.

This is not thousands of rupees, but lakhs of rupees, and sometimes even crores if the families getting married are wealthy.

Matrimony’s focus on communities, specifically the South Indian ones, would be an interesting move. 

Like Swiggy and Zomato were cleanly splint by South and North geographies, Matrimony and Shaadi were split the same way. But unlike Swiggy/Zomato which are low AOV transactions, these were high AOV transactions.

Transactions which were almost directly linked to AOV because of being so high.

Despite having lower search traffic than Shaadi, the ominchannel, community focused approach, led by a South Indian base, resulted in higher revenue.

Matrimony.com’s early differentiator was in developing a strong understanding of the varied ‘micro-markets’ or communities that made up the Indian diaspora, and their unique requirements. It's concentration from day one, by chance, was South India. 

These would make it a highly effective, community led, marketplace winning the south.

1 Cr Weddings and No Funerals

As any marketplace model, Matrimony.com’s moat lay in its large captive user base and the network effects resulting from it. 

Perhaps even more important than the network effects that come with growth is the value of reputation while operating any online marketplace.

We would go even further to say that the product that Matrimony.com is selling isn’t matchmaking services or wedding logistics. Matrimony.com is providing their users with a trusted advisor that can replace or assist the original ‘wedding planners’ - parents. 

To capture and emphasise this trust, Matrimony.com launched various features on their platform to provide members with the comfort that the people they are meeting through the service are legitimate.

In addition to being deliberate in the sharing of success stories that came through their service, they began to implement a six point trust badge feature to validate profiles and improve security.

Capitalising on these shifts, Matrimony.com ended 2017 with 30 lakh active profiles, adding another 400K by 2018. 

Total paid subscription count crossed 700K in 2018. Steady volume growth was accompanied by rising prices. Average transaction value rose 5% yoy in FY18 to reach Rs 4,500.

Between FY14 and FY18, revenue grew from Rs 200Cr to Rs 335Cr at a 13% CAGR. Its asset-light tech platform allowed its revenue to grow with minimal cost expansion. 

The physical outlets, once matured, delivered growing revenue on a steady cost base, resulting in significant operating leverage. 

As the brand gained popularity, it benefitted from organic traffic, resulting in decreasing CAC. Advertising and promotion as share of revenue dropped from 24% in FY14 to 17% in FY18.

Consequently, company EBITDA margin rose ~4x from 6% in FY14 to 23% in FY18. EBITDA on matchmaking, excluding marriage related services, jumped from 14% in FY14 to 33% in FY18.

Matchmaking may have churn, but its pretty profitable.

Operating leverage was beginning to kick in and the ecosystem that Matrimony.com had built around the wedding industry was showing its strength in the growing EBITDA margin, subscription growth, and decreasing customer acquisition costs.

But as the saying goes, “Behind every great man, is a great woman”. In this case, behind the booming Indian wedding industry was the sneakily growing Indian dating app revolution.

Algorithm Ne Bana Di Jodi?

Dating apps burst on the scene in India in the mid-2010s, but it wasn’t love at first sight.

Both local and international players took a few years to get going, buoyed by technological, generational, and demographic shifts in the Indian consumer.

Global players like Tinder and Bumble quickly found product market fit in India with their fresh and innovative marketing campaigns and user-friendly interfaces. In good time, Indian players like Aisle stepped up to the plate to provide similar services with more of a local flavor.

The prize they are competing for is the $63MM online dating market in India, pegged to growth to $77MM in 2024.

While there is a strong argument to be made that mindset shifts, especially when it comes to marriage (still very much a family and society affair in India), will take time to change, there is a perception danger that the Matrimony.com’s of India face - that the next cohort of India’s youth will see them as ‘arranged marriage’ portals and move away.

Understanding the positioning and branding efforts of top matrimony platforms in India will assuage some of those concerns.

As early as 2013, Matrimony.com and Shaadi.com launched ad campaigns that encouraged their target audience to challenge the way that they think about certain societal practices and traditions.

Jeevansathi in 2016 promoted a campaign directly calling women in India to get online and find a match for themselves. According to their CEO, “It’s the next level of positioning now where parents are not necessarily active in decision-making as opposed to their children”.

But while the incumbents rallied to prevent the incoming wave of dating apps coming from all directions, this did affect Matrimony’s financial results in recent years. While revenue continued to grow in FY2019 and FY2020, EBITDA margins steadily declined since their FY18 peak of 23.1% and settled at 15% in FY20.

Paid subscriptions, perhaps Matrimony.com’s strongest leading indicator of business success, also peaked in FY 18 at 75L and is down to 70L in 2020. It followed a decline in its market cap, which got butchered during COVID.

Matrimony was down to 25% of its IPO market cap, or 500Cr, when COVID hit, as investors flew away from any business requiring physical meetings. 

But the world adapted, and Matrimony is a resilient business. 

Post-COVID, there has been 30% growth in Matrimony’s matchmaking services as more people are online and looking for partners, but their marriage services revenue line has been significantly hit due to the lack of in-person weddings and celebrations.

Matrimony leveraged technology to push even further, and as the world comes back to “normal” it will be even stronger. 

The challenge for everyone involved in India’s market for love and relationships is one that comes down to identifying the decision-maker in Indian households and effectively targeting that entity.

If it continues to be family-driven and community-centric for the foreseeable future, then Matrimony.com and their peers are well positioned to provide a useful and trusted service.

But if the next generation of Indian brides and grooms take matters into their own hands then there could be a seismic shift in the way Indians tie the knot.

Although Matrimony has struggled to take off in recent years, and could perhaps “pale” in comparison to high flying internet unicorns, one must always remember that the market has set its price. 

Having pioneered internet services, profitability, going public, building trust and leading a market, it has been a two decade long journey to learn from. The Indian Matchmaking market, now popularized by Netflix, is going to be an even bigger pie ten years later. 

BharatMatrimony looks set to continue to dominate it, having put the customer at its core. 

Having dominated Indian matchmaking for the last few decades, Matrimony looks set to do so for the next few.

By Abhinav, Bhoomika, Saloni, Saumya, Shiraz and Aviral

Audio Version: Behind the Scenes with AJVC

As usual, we have done a behind the scenes format with the writers and host Mazin

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