While the global market for dating apps grew by only 6% last year, slowing down considerably after the COVID-19 pandemic, LGBTQ+ dating apps from Cosmic Latte had a record year. The Czech tech company developing dating apps for the LGBTQ+ community grew by 21% in 2023, with its turnover climbing to $3 million and generating $430,000 in profit. Its portfolio, consisting of the Zoe dating app for lesbians and Surge for gay men, reached a major milestone in June, when it was downloaded over half a million times, for a total of over 25 million downloads and 27 million users. Last December, the more established Zoe app had grown 24% YoY, while the newer and faster-growing Surge reached 44%. CEO Milan Kovačič, a member of Forbes 30 under 30 in Slovakia, attributes the above-average growth to Cosmic Latte’s emphasis on artificial intelligence.
“Last year was a huge success for us at Cosmic Latte. We managed to grow significantly faster than other players in the market. This is proof that we are moving in the right direction. Our bet on artificial intelligence has paid off, and we’ve managed to consistently innovate while differentiating ourselves from others. In addition to the product, we’ve also worked on our internal organization – we have expanded our team with experienced professionals and we’ve set up a solid organizational structure with C-level leadership and a clear division of roles. At the same time, our team is more diversified and international, which further contributes to the improvement of our services,” comments Milan Kovačič, CEO of Cosmic Latte, on last year’s achievements.
Cosmic Latte recorded a turnover of $3 million last year. The company has maintained a profit margin of around 15%, with a profit of $430,000 in 2023, despite significant investment into the development of new technology and expansion of its team. Today, the Cosmic Latte team consists of around fifteen internal members and a dozen external administrators for countries where the Zoe and Surge dating apps are popular.
This rapid upturn in Cosmic Latte’s growth coincided with the arrival of its current CEO, Milan Kovačič, who brought his extensive consulting experience from McKinsey and PwC, where he oversaw digital transformation, business analysis, and portfolio design projects. Openly gay, Kovačič is an active proponent of queer leadership in the Slovakian and Czech business community, addressing LGBTQ+ issues in business and technology on his own YouTube channel.
“A key factor in our growth is the use of artificial intelligence, which allows us to maintain a smaller, more efficient team while improving the product and optimizing revenue. Our AI can assess the attractiveness of individual users, which opens the door to completely new features and revenue streams; for example, we can give users the option to pay extra for the algorithm to throw more ‘attractive’ profiles their way. It allows us to dynamically price the paid version for individual users, moderate content, and even handle copywriting more efficiently,” describes Kovačič, who himself is a postgraduate student at the University of Oxford, where he pursued a degree in artificial intelligence and leadership on a Director’s Award Scholarship.
Cosmic Latte has experimented with using AI for both apps in its portfolio, resulting in new features, increased revenue, and improved functionality. Zoe is already the number two lesbian app in the world. It has recently enjoyed increased interest in Asia, where it is number one in South Korea in the LGBTQ+ category by downloads, and in Japan and Taiwan among lesbian apps. In the US, Zoe is number one for keywords such as “lesbian dating,” “lesbian chat,” and “gay dating apps” (according to Sensor Tower). Cosmic Latte’s popularity has also been helped by its inclusion as a Featured App on the App Store during Pride Month, a month dedicated to supporting LGBTQ+ rights.
However, the company is far from finished with its AI development. This year, for example, it plans to use the technology to automate profile verification, improve marketing campaigns, and streamline other routine tasks, particularly in relation to managing country applications. In doing so, it wants to keep the team headcount low and maximize financial results. They also expect a boost from a new source of advertising revenue, which the company started to deploy in the apps last year and accounts for 2% of revenue. So far, their ad revenue has doubled every quarter. Increased differentiation from competitors will also be a key product focus.
“Our industry is extremely competitive, especially the gay dating segment. So, it’s crucial to differentiate ourselves as much as possible and offer better dating options. We’ll be adding new features to make Surge as visual as possible, like the option to have moving profile photos and filter by body shape or amount of body hair, which are all parameters that help users choose more accurately according to their preferences. With Zoe, we are trying to strengthen the social aspect of the app, to create a community that will stay with the app even after successfully finding a partner,” explains Kovačič.
