How Muzz lost a battle but won market share
In the quest to innovate, disrupt and offer something new, startups can often agitate and annoy incumbent players. For Muslim-focused dating app Muzz, formerly Muzmatch, the company it annoyed was the publicly listed Match.com Group, owner of Tinder, Hinge and OkCupid.
Match, which acquired Egypt-based Harmonica in 2019, sued Muzz both in the US and the UK, initially for patent infringement (which was settled out of court in 2021) and then for trademark infringement, arguing that the use of “match” in its name gave the startup a “free ride” off Match Group’s reputation. The startup lost the case in the UK’s Intellectual Property and Enterprise Court, rebranding to Muzz last year. Muzz is currently appealing the Court’s decision.
For founder Shahzad Younas, the past couple of years have not been easy, facing a behemoth in court, while also running and expanding his UK-based company.
“It’s been going on for so long, it’s stressful and a massive distraction for me personally. As a business, it has cost us more than £1 million in just defending ourselves,” says Younas. “It doesn’t help us to think we are part of Match Group, we’ve rebranded, we lost the court case and have this appeal ongoing, we’re a company on a mission and it’s a distraction.
“I remember when the decision was going to come out, our goal was to come out of this stronger, we were very ready for whatever decision. We’d worked on revamping our app. As a founder, things don’t always go the way you want, there are so many things that you don’t see coming, so you just crack on with it, you can’t let it get you down and you move on. As the CEO, it’s on me to protect the team from that and focus on what’s important. If anything, it has driven us more,” he adds.
Younas was working as an investment banker when he came up with the idea to launch a dating app targeting Muslims.
“I remember seeing some mainstream dating apps and you could talk to a stranger and it blew my mind. It was very novel at the time. I thought Muslims need an app like this for marriage, so I quit my job and sat at home learning how to build apps. I built the app on Android and iPhone in six months,” he says. “I was diving into this full time, I’d quit my job, I had no money coming in. I love tech and I thought if this is going to be my business, I need to know it inside out.”
Once the app was in place, Younas launched Muzz in 2015, hoping to offer a platform for young Muslims to meet, talk and eventually get married.
“The hard bit of any startup is how you market it, I was extremely annoying and would go to any social where Muslims would be, I would stand outside mosques and hand out flyers. Initially people didn’t understand it, early mainstream dating apps didn’t have a good reputation,” he says, but the need for a Muslim-focused dating app was so great, that Muzz quickly started gaining traction.
What Younas had built was not entirely novel for the Muslim community, websites like Shaadi.com and SingleMuslim.com already existed, but they were “old fashioned and expensive” according to Younas and focused too heavily on physical features and appearance. Muzz modernised the space for young Muslims and by the end of the first year of its launch, had already attracted 50,000 people onto the platform. Today, it is the world’s biggest Muslim dating platform with more than eight million users and boasts 400,000 marriages.
“During that time, I was doing all the customer support, releasing new features, it was a one man band. In 2016 I made my first hire, an iOS and Apple engineer who rebuilt the app and we relaunched in August 2016 with loads more features,” says Younas.
These features included better chat abilities, the chaperone feature [which allowed a third party access to the messages exchanged between a couple] intended to encourage good behaviour.
“We don’t want to be a shallow or superficial app, the key part of the app is privacy and richness of the profile, there are 30 plus data points on there [related to] what’s important to people when it comes to finding a partner,” he says. “Dating apps in general are marketplace apps, you need men and women and enough people and you need them to be active. I focused on the quality of the app and for a long time I didn’t charge a single penny to use the app [which] made things more accessible.”
Muzz did not monetise the app for two years and it was only after it got into Silicon Valley’s Y Combinator accelerator programme in 2017 that Younas began to develop a revenue stream. It also around this time that Match Group attempted to acquire Muzz, making four offers, but Younas rejected them and Match eventually acquired Egypt's Harmonica, later rebranding it to Hawaya, before closing it down.
“A lot of dating apps didn’t survive and I wanted to make sure there was enough value. I came back to London and started building our first paid feature – instant chat [so] you don’t have to wait for them to like you back, you can message directly. We launched it on the app and almost immediately people started buying it. Over time, what we’ve done is introduce new features and charge for those rather than taking old features and making them paid.”
Only about 10 per cent of Muzz’s eight million users pay for its features, the remainder never pay.
“We have a profitable business, we’ve done a Seed and Series A round and raised $9 million in total. We’ve put some of that money to work, but now we’re profitable we’ve done things the way we want to,” says Younas.
Typically, startups focus on one market before expanding geographically, but Muzz was available globally the day it was launched.
“The first country we started dipping our toes in was France in terms of specific marketing, we targeted Muslims in non-Muslim countries. Now our big focus is Muslim-majority countries, Pakistan and the Middle East,” says Younas. “There is a cultural change happening, young Muslims want to be more empowered in terms of their journey of who they find to marry. They’re all on social media which has brought sharing of values and information. Those extended family networks are not as big as they used to be, even in Muslim countries.”