The co-founders of Zoosk, an online dating company, remember the exact moment they met Deepak Kamra. They were days away from signing a terms sheet with an investor, raising a $4 million Series B. Everything had been settled and the paperwork was getting drawn up.
Then, they got a call from Kamra. He had gone golfing with Saeed Amidi, founder of the Plug and Play Tech Center accelerator, and heard about Zoosk. Kamra was a matchmaking aficionado, and he had been looking for an online dating company to place his bets on. He wanted founders that would go the distance. “It’s easy to start an online dating site but it’s hard to build,” Kamra says.
Kamra can be very persuasive, and he managed to convince Zoosk co-founders Shayan Zadeh and Alex Mehr to drive up to Napa Valley overnight. The Canaan partners were having their annual retreat there, and Kamra wanted the Zoosk founders to pitch them collectively, so that Kamra could sign off on an investment before the other firm finalized their offerings.
“The fact that a VC is willing to move earth and sea to get a company he’s excited about matters,” Zoosk’s Zadeh says. “On the way back from Napa he called us and said, ‘Don’t sign anything. I’m going to send a term sheet.'”
Kamra has been an investor with Canaan for twenty years. He invested in Match.com in 1995. Since then he invested in India-based online marriage matchmaking site Bharat Matrimony and then in international online dating site Zoosk, earning him the nickname The Love VC. He’s invested in other areas too, like online advertising and enterprise software, but “The Love VC” just seemed to stick.
Kamra has had an inside look at the transformation of online dating. Nowadays, an estimated one third of American couples who get married met online. But that wasn’t always the case. “Back when we first started, everyone would giggle when you said ‘online dating,’ and no one wanted anyone to know they were doing it,” Kamra says. “But now it’s out in the open and everyone talks about it. We want people to start younger and do it longer.”
When Kamra invested in Match.com, browsers had just become a thing. Match was originally supposed to be the first vertical of an online classifieds site — Electric Classifieds — created by Gary Kremen. “He had to pick a vertical,” Kamra says. “If he chose jobs we could have been Monster, but he chose dating.”
Match sold to Ticketmaster in 1999, and from then on Kamra had the matchmaking bug. He kept his eye out for online dating investments, and found his next one in Bharat Matrimony, an Indian marriage site, in 2006. The founder Murugavel Janakiraman remembers how aggressively Kamra pursued the deal.
I was inclined towards a strategic investor first, followed by a VC. But Deepak categorically disagreed with this stand of ours commenting, “If that’s the case, then 5 Million dollars is walking out of this room.” That changed our line of thought and subsequently, we were able to convince the strategic investor Yahoo that we’d work with both on the same terms. In the end, we felt very happy with the decision.
Bharat Matrimony is now the largest matchmaking site in India and is preparing for an IPO next year.
To Kamra, the opportunity in matchmaking startups has only grown over the years. Because there’s always going to be people looking for love, it’s an never-ending market. He’s been keeping his eye out for Match.com 2.0, a dating company for Web 2.0 and the 21st century.
He believes he’s found it in Zoosk. “There are hundreds of dating sites and nothing really struck us as being able to challenge Match.com until Zoosk,” Kamra says. “They were going after a younger audience, and they were going after social, they got their fast growth through the Facebook app.”
He passed up Ok Cupid, which didn’t have the revenue, and eHarmony, which was too limiting to daters (infamous for its now-revoked ‘no gays allowed’ policy).
But he went after Zoosk with the “take no prisoners” approach he’s become known for. He liked Zadeh and Mehr’s perspective on online dating. They’re both computer scientists, and their focus is data analysis. They use their engineering knowledge to engineer loooove.
Their algorithms analyze Zoosk users’ browsing data to send them possible matches. For example, you may say you’re conservative, but if you’re browsing profiles of people who are liberal the engine will conclude that politics don’t matter to you that much in dating.
“I think that’s the next wave dating sites will ride,” Kamra says. “First it was browsing, picking people out. Then it was social, and using social sites to get a lot more information. The third wave is mobile, using dating sites on mobile devices. Then I think the fourth is using big data to match people.”
Saeed Amidi, the Plug and Play founder who told Kamra about Zoosk, says that he would never bet against Kamra’s intuition. After all, “He had the vision to fund Match.com in the very early days of the Internet, back in 1996 when most people were not on the Internet,” Amidi says.
Kamra’s roots in the industry precede him. When he goes to any event, there’s always two or three or four or dozens of people who come up to him and tell him they meet their partner on Match.com or Zoosk.
As for the Love VC’s love life? He met his wife the old-fashioned way, in a bar in New York. “Although I suspect she may have arranged it,” Kamra says. “What a great opening line that would be if I was single now: I am the love VC.”
[Illustration by Hallie Bateman for Pandodaily]