Pictured above: Sisters Arum, Dawoon and Soo Kang (L to R), at their office in San Francisco. (Photo by Andria Lo).
by LISA WONG MACABASCO
During a talk at The Korea Society in New York City last November, twin sisters Arum and Dawoon Kang sat at the front of the room, discussing the launch and early success of their three-year-old start-up, Coffee Meets Bagel.
Taking turns answering questions from a crowd of about 30 young professionals, the Kang twins, 32, looked practically indistinguishable from one another, with their high cheekbones and big smiles. Yet on this night, they formed a formidable two-women team as they fielded questions about finding one’s way as an entrepreneur.
While its name may suggest a breakfast delivery service, Coffee Meets Bagel is an online dating website and mobile app whose streamlined approach to matching busy single young professionals has made it a popular choice in a crowded, competitive market.
Listening to the founders share their expertise of the online dating industry, it’s clear to see why. Quick to smile and exuding an upbeat, positive energy onstage, Dawoon and Arum effortlessly reeled off statistics about users’ habits to a small, but receptive, audience. (Older sister Soo, the company’s creative director and fellow co-founder, couldn’t make the event.)
Born and raised in Seoul and educated in the United States from high school onward, the Kang sisters head up one of the most promising online dating companies of recent years, whose recent inclusion on ABC’s reality show Shark Tank has catapulted it to further fame.
Launched in 2013 in New York, and now servicing major U.S. cities such as Boston, Chicago, Los Angeles, San Francisco and Washington, D.C., Coffee Meets Bagel boasts between 100,000 and 500,000 users and claims it’s helped make more than 20 million matches.
The company has experienced a 25 percent month-over-month growth in users since its launch, including 160,000 unique visits in November 2014—a sevenfold increase from the previous year. In its first year, the site generated $87,000. By the end of 2014, that figure jumped to $1 million. Its goal in 2015? To bring in 4 million users and make $10 million in revenue, allowing it to break even. It’s off to a good start: on Feb. 18, the company announced it had closed $7.8 million in Series A funding led by an existing investor, DCM Ventures.
Its small office headquarters in San Francisco runs on a lean staff of 12 full-time employees, and houses a small wedding bell the founders ring whenever they learn about a new engagement or marriage between Coffee Meets Bagel couples. (That’s about 80 rings, so far.)
“We have yet to be invited to a wedding,” Arum says, with a laugh, in a phone interview with KoreAm. In early January, the Kang sisters appeared on Shark Tank, where entrepreneurs pitch their ideas to a panel of “shark” investors. Dressed in bright pink T-shirts emblazoned with company slogans, the sisters delivered a crisp presentation, asking for a $500,000 investment in exchange for 5 percent equity in the company.
“We all know online dating sucks,” Dawoon told the panel. “Why? Because it treats people as a piece of information you search for using a huge database. People want to go back to a time of happenstance where you just stumble upon someone special, maybe through a friend. That’s why we created Coffee Meets Bagel.”
While the investors ultimately passed, they were clearly impressed. Host “shark” Mark Cuban called the concept “brilliant” and even pitched a hypothetical offer to buy the business for $30 million—the largest sum cited in the show’s history. But the Kang sisters, without flinching, said they were confident the company was worth more.
“We think this model and the product has potential to be as big as Match,” they said, pointing out how the paid dating site Match.com generates $800 million a year.
“You know what they say—like in dating, ‘Never settle,’” a voiceover from one of the Kangs said as the sisters departed the boardroom set. Educated at top business schools in the country, Arum and Dawoon took significant pay cuts from their highpaying jobs in the financial services sector to found Coffee Meets Bagel, addressing what they perceived was a gap in the online dating sphere. Soo’s lackluster experience in the online dating market initially inspired the three sisters to put their minds and business acumen together to hatch the site.
“All [these dating] services were all about searching and browsing,” Dawoon says. “That just didn’t sit right with [Soo]—that random strangers could have access to her information and photos.” Plus, more discriminating websites such as eHarmony required filling out questionnaires that can take hours to complete, she said.
“It’s excruciatingly painful to get on board, and it wasn’t very effective at all,” Dawoon says. “We figured if we can create a brand that’s exciting for women, it would be exciting for guys as well. When it comes to dating products, women have a higher bar than men. And where women are, guys will come.”
Coffee Meets Bagel, which is free to use, has an average user age of 28; it is also one of the few online dating services that boasts more female users than men.
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Coffee Meets Bagel’s homepage
The company uses a proprietary algorithm to send each user one potential match, known as a “bagel,” each day. Users sign up via Facebook, and matches are culled through one’s network of friends. A user has 24 hours to either “like” or “pass” on a match.
If both individuals matched by the app select “like,” they are then connected and invited to chat through the app or private text message (phone numbers are not revealed). Matches have one week to converse and decide whether or not to meet in person.
Because they wanted to target women, comfort and accessibility were paramount to Dawoon and Arum. So they decided on a “next-door neighbor” type of branding. They wanted to eliminate all the tiresome searching and browsing typical of other online dating sites. “Quality over quantity” became their business mantra.
But first, about that name: given their target market—young professionals in major metropolitan areas—the sisters thought, “What is the one thing a lot of young professionals look forward to every day at work?” Dawoon says. “Coffee breaks.”
And what goes well with coffee? In New York City, where the Kangs started the company, it’s gotta be a bagel.
“Choosing a name for your company or your product is always a challenge,” Dawoon says. “It was important to us that we appeal especially to women, because that’s who we had in mind. We wanted to make it sound cute and safe.”
The most common complaint from users—and it’s mainly from men—is that one match a day is too few. Part of that has to do with what the competition offers—other dating apps like Tinder don’t limit the number of matches on any given day.
“When people get used to that kind of service, our app seems extremely slow,” Dawoon says. But the app is built on a specific model: “We don’t want to create a product that just serves a hookup purpose,” she adds.
Suffice to say, the Kangs honed in on a very lucrative corner of the market. About 35 percent of U.S. couples who wed between 2005 and 2012 met online, according to the journal Proceedings of the National Academy of Sciences. Globally, the mobile dating market is expected to be worth $2.3 billion by 2016, up from $1 billion in 2011, according to Juniper Research, the mobile research firm.
“This is a big business,” Arum says. “It’s pretty amazing. The number of singles around the world, especially in the U.S. and developed countries, is growing a lot. The demand for this service—it’s already very high. But I think it will only grow.”
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The Kang Sisters were raised in an entrepreneurial household. Their parents own metal recycling businesses in Seoul, where they currently live, and always encouraged their offspring to start a business, saying it was the “best way to contribute and leave a legacy in the world,” Arum recalls.
They also learned independence and self-sufficiency from an early age when, as teens, they were sent to the U.S. for high school.
“It was our dad’s Korean dream to study in the U.S., and he never got to do it. Out of all places, he sent us to Hawaii,” Arum says, describing the place as “literally, a paradise.”
Via email, Jin Soo Kang discussed his decision to send his daughters abroad to live on their own at such a young age. “Many people asked me, “‘Aren’t you worried?’” he recalls. “Of course I was worried. However, I was able to do it because I knew that they would be there for each other if one needed help. I had confidence that, together, they would be able to figure things out on their own.”
It was that independence, Dawoon says, that taught her and her sisters to tackle new challenges beyond their comfort zone. “Everything we do is new, there’s a lot of uncertainty involved, and it’s very stressful,” she says. “But I think we do a good job navigating through that.”
Arum and Dawoon attended the University of Pennsylvania while Soo enrolled at Parsons School of Design. After graduating, the twins worked as senior analysts for Avon Products in New York while Soo worked as a graphic designer for brands like Belvedere Vodka, Samsung and Sally Hansen.
Dawoon enrolled at Stanford Business School in 2007 and later worked in Asia for J.P. Morgan. Arum, meanwhile, entered Harvard Business School in 2009. It was two years later when the sisters came up with Coffee Meets Bagel.
Their father remembers his reaction to his daughters’ business idea. “I was surprised—especially because all three of them [at the time] were singles in their late 20s, which is considered quite old in Korea for women to be single,” he says. “I joked, ‘You are going to help other people find love? Why don’t you find one for yourselves first?’ [But] they seemed so passionate about it, which is the most important thing.”
As for the founders’ own luck with love, Arum is now married, while Soo and Dawoon have dated men they met through the site. (Sisters, though, know best: Arum used the app’s “Give” feature to introduce Dawoon to the last person she dated seriously.)
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As close-knit as they are, the sisters say working as business partners has its pros and cons. On the plus side, there is complete trust: they never have to question the others’ intentions. “We know we have each others’ backs—and that is huge,” Dawoon says.
Even their methodology for ironing out disputes is an emblem of efficiency: they use a leadership coach, who has taught them to give one another constructive feedback. They also enlist a mediator to resolve arguments.
Nevertheless, “we still fight a lot,” Arum laughs, explaining that the sisters all have strong opinions.
Arum remembers those first anxious, sleepless nights after the site’s launch, intensely monitoring how many people were signing up. But as the userbase quickly grew, so did word-of-mouth marketing. And slowly, it’s begun to catch on.
Nikhil Thakur, a 34-year-old startup CFO in New York, met his wife after just three months on the site. Thakur said he liked the simplicity of the process and the Facebook connection. “The type and quality of people on it were the type and quality I was interested in meeting—young professionals, college degrees—that type appealed to me,” he said in an interview.
While Coffee Meets Bagel does not reveal how it matches two people, the founders say it comes down to one’s profile and data provided when signing up. Over time, the company learns more about a user based on whether a match is “liked” or “passed” upon.
“At the end of the day, what we really want to do is help people find somebody they can spend the rest of their lives with,” Arum says.
What’s not to like about that?