[Updated] Why we doubled-down on S’More — The Anti-Superficial Relationship app

Benson Oak partner Yoni Mindel originally published this in October 2020. He has updated the post after the formal announcement of S'More's Seed II round by BOV plus the new app launch as S’More continues to deliver on its promise of a new and improved “dating 2.0” experience. (Techcrunch announcement)


Benson Oak Ventures has the mission to support visionary and execution-focused entrepreneurs build transformative companies. We invest in multi-stages, based on a high-conviction model with the aim to double and triple down to increase our exposure to the best companies.

We led the pre-seed deal in S’More, backing Adam Cohen-Aslatei, sole founder with immense strong founder-market fit. Adam spent over a decade in high-level marketing, product and monetization positions for a wide range of dating companies. We were excited by his vision to define a new category at the intersection of social and dating, positioned as The Anti-Superficial Relationship app.

Due to the belief in Adam and his vision, we led the company’s seed $1M round, which Adam raised prior to product development and market launch. By August 2020, a year after our investment and just 8 months since the January beta launch, S’More had amassed close to 100,000 users (now over 165,000) and is already showing monetization, with engagement numbers on par with leading dating apps. Adam’s vision is the basis for S’More’s innovation, moving away from the picture first, mindless swipe and towards finding deeper and more meaningful connections and relationships. The message is resonating with users, as seen through their social, engagement data and feedback. The team is building a community around the product and mission — understanding dating is as much a lifestyle media brand as it is an app experience.

Our investment approach is to invest early, devote operational time with the team in areas we can provide value and thus learn about the business from within, in order to develop a sense of conviction required to double down on the investment. This approach represents an investment de-risking strategy while also enabling us to build strong relationships with our founders, providing rapid access to funding at key moment in the company’s trajectory when operational focus of the management is most required.

S’More represented a great opportunity where we’ve been consistently impressed by the team and execution around ambitious objectives and key results (OKRs). We decided to double down and lead their second seed round alongside a great consortium of current and new notable investors such as Mark Pincus’ Workplay Ventures, Gaingels VC, Loud Capital/Pride Fund, SideCar Angels with 20+ other value add investors here. This gives the company the opportunity to accelerate their growth and capitalize on the strong momentum they have shown in creating a desired new niche in an increasingly dated industry (pun intended)

We’re excited to see the team consistently build upon their mission and get such strong market receptivity. For more details on how S’More addressed the basic 4 Question Investment approach, keep reading!

IS IT A BUSINESS TO MASS MARKET COMPANY

In 2019 at least 40% of relationships in the US started online. By the end of this decade it’s not unreasonable that the vast majority of new relationships will start online, part of the reason being, that online dating removes friction and fits perfectly into people’s busy life styles.

The stats are staggering with US singles using anywhere between 2–4 dating apps at the same time with usage numbers of 9.8 days a year, compared to Snap (4d), Instagram (8.7 d) and facebook (14.7 d).

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Dating apps are used as frequently as the best social apps and monetize like top grossing games

Covid has only accelerated usage trends across consumer apps, and loneliness + social distancing is pushing many to look for more meaningful interactions online. S’More is seeing this across usage metrics of people returning to the app, number of chats started and chat lengths. All metrics are showing upward trends in an app that shuns traditional forms of swiping and liking and impersonal, infrequent chats. (80% of respondents in S'More survey say they haven'y been on single live, in-person date in 2020).

Dating is a global and growing phenomenon with over 300M users worldwide — excluding China. Because S’More isn’t about superficial connections and pictures first, they are a great fit for the many conservative countries around the globe.

HOW DO THEY WIN?

From our very first meeting it was crystal clear Adam is the ideal founder to undertake this journey. He started out with a strong product and brand vision for S’More — for those wanting something more (most frequent feedback of existing swiping culture dating apps) and built an exceptional and diverse team.

They’ve been launching city by city with local ambassadors and events (both IRL and virtual) and approach online relationships as exquisite app experience, lifestyle brand and media business. Adam has the weekly S’More Live show on IG with over 60 celebrity chats about dating and relationships gathering thousands of views and then being picked up and republished by mainstream media (Grit Daily sharing interview with Tom and Lisa Bilyeu of Quest Nutrition and Impact Theory) They are receiving a lot of inbound attention from the press as their message of authentic Vs superficial is timely and resonates, especially during these times of Covid and Black Lives Matter. S’More was one of the only dating/relationship apps to have never had any race filters (other apps have since removed).

S'More is also producing anti-superficial dating content for TV in partnership with producers who ran programming TLC and Gordon Ramsay studios, creating iconic shows like "Say Yes to the Dress", "90 Day Fiancé", "I Am Jazz", and "Hell's Kitchen".

Ultimately we believe S’More will win because of an A-Class team that is expeditiously getting to product market fit with a completely new approach to dating and relationships, at the intersection of dating, social and media. Building a powerful brand that lives beyond an app / that consumers and the media love and a focus on a huge and growing market with Covid accelerating changes in how people meet and users connect online.

The Product

The S’More profile stands out from the crowd because the focus isn’t on photos (initially), which are automatically blurred. S’More users enjoy a more dynamic profile setup displaying colorful icons, animations, voice recordings, real-time conversation prompts and music. Each profile has a unique look and sound that represents who a person is beyond the surface level and with their app redesign launched earlier this month a focus on personalization, self expression and more social and community features.

From Adam: “S’More represents a layered cookie because it’s about getting to know all the layers of a person,” Adam explained. “We wanted to change user behavior to be more intentional and more about getting to know a person before passing judgment on little more than a selfie.”

S’More is the next generation relationship app that provides daters with a totally interactive way to learn more about a person before evaluating them solely on appearance. The profiles are modular and customizable with drag and drop functionality so users have control over what they show and highlight. Users get daily matches in a carousel format with customizable backgrounds based on interests and personal photos that unblur as you interact with the person and exchange messages. The idea is to get to know something about the other person before seeing them.

These interactive modular profiles open up a wide range of product experience possibilities while being visually compelling and interactive. It takes the old web experience of questions and answers and transforms it into a mobile friendly experience while removing the arduous process of typing out the answers to those questions. Brands are seeing the potential in rich interactive "Branded Profiles" with multitude of ways to craft their message and opening up new revenue paths for the company.

The team is consistently testing features in line with the mission and voice while focused on improving KPI’s around engagement, user retention and premium paying users.

Users are prodded to verify their images throughout the product flow and limited app capabilities with 100% of profiles being verified for cat-fishing using AI tech to avoid spammy and fake profiles. (big issue on other apps). They have internal rating systems to incentivize good and proper behavior making sure all users, and especially women feel safe.

The company has 300 + 4 star reviews and have pipeline of exciting changes to product coming from lessons learned since initial launch. They are live in 6 cities (NY, Boston, DC, Chicago, LA and now Dallas!) and have been covered in the press across the US and in the UK by the WSJ, WashPost, Forbes, Elle, Marie Claire, and more. They were even spoofed on Comedy Central and were featured as a Hot Topic on The View.

IS THE BUSINESS MODEL SCALABLE AND SELF-SUFFICIENT?

At Benson Oak we lead investments in consumer products that have monetization and strong business foundations from the get go.

The dating industry, much like the gaming industry has clearly defined and proven business models alongside strong usage numbers. In 2018, Tinder generated $800M in revenue from their 4.1M paying users and, Bumble - at the time only 4 years old - generating around $200M. Mostly a mix of subscription + a la carte selections of premium features

In late 2019 Blackstone took a majority stake in MagicLab (Owner of dating apps Bumble, Chappy, Lumen…) at a ~$3B valuation and Bumble is expected to go public in the next few weeks at a $6–9B valuation!

S’More built the product with monetization in place at launch and while focus was on user experience initially, we’re now seeing MAU grow 30% MoM with thousands of paying subscribers and 2x growth just in last month since redesign.

In the longer run, their investment in unique content, community, social features and brand around their core mission, generates strong organic growth and brand awareness without over-reliance on paid performance marketing.

BOV LEADING THE ROUND

We consider Adam as great example of founder — market fit, spending over 10 years in the industry building and monetizing product and knowing all important players. He’s built a strong “founding team,” including chief architect Long Nguyen, head of operations Sneha Ramanchandran, head of product and design Regina Guinto and senior developer David Lichy and together generated exceptional traction, launching an app right as Covid started.

We led the pre-seed in S’More as it strongly fit our investment thesis — a strong consumer product, building a community around the brand and monetization from day 1. We’re excited to now double down and lead their seed with a consortium of strong new and existing value add investors and be there alongside S’More as they continue to define a new dating category — of finding meaningful connections and relationships online.