Since launching Muzmatch from his bedroom in north London ten years ago, Shahzad Younas has worked 18 hours a day to create the Muslim marriage app with 5 million users worldwide.
But over the past year he has battled a future-threatening lawsuit brought by Match Group, the dating giant that owns much larger services including Match.com, OkCupid, Tinder and Hinge.
“I’m exhausted,” he told the Financial Times. “My motto is always to put it all in. No regrets.”
Muzmatch was the defendant in a corporate intellectual property court last week in a trademark lawsuit filed by Match, the Nasdaq-listed conglomerate with a market capitalization of nearly $33 billion.
The group accused Younas of “piggybacking” on its intellectual property, largely for also using the term “match” in Muzmatch’s name and branding. The startup argues that this refers to the act of matchmaking.
The legal battle sheds light on the online dog dating industry, pitting a niche upstart against a global giant with a record of recruiting small players. Texas-based Match has also previously been embroiled in legal disputes with founders of rivals Bumble and Tinder as it seeks to defend its position as the world’s leading dating company.
Younas claims Match made four moves to buy Muzmatch, culminating in a 2019 dinner at The Ivy restaurant in London where he rejected a $35 million final offer. Match said he was approached by Younas for acquisition talks.
The Muzmatch platform caters to Muslim dating with specific features to serve this community, including an optional chaperone, the ability to blur photos, and automatic foul language censors.
It emphasizes marriage as the ultimate goal of hookups on the platform, distancing it from casual dating apps which Younas says are not in line with Islamic values. The company manually reviews each profile and user complaints.
Match, whose shares have fallen more than 30% from an October peak after earnings beat analysts’ expectations, argued in court papers that “this is a clear case of freeriding on the reputation of the UK market leader to become a major player in the online dating and dating market”.
Younas argued that it would be “problematic” to align with Tinder’s parent company, as its reputation for casual dating clashed with Muzmatch’s more conservative religious marriage ideals.
Younas, 37, started Muzmatch as a website in 2011 while working as an investment banker at Morgan Stanley. He quit his job three years later, teaching himself how to code and designing the first app in a Word document.
The London-based app, unveiled in 2015, operates in 190 countries, claiming to have helped arrange 100,000 weddings worldwide.
Younas said he spent nearly $1 million to dispute Match’s claims, relying on Muzmatch’s revenue from premium subscriptions and in-app purchases, and funds raised during his Series A $7 million led by US hedge fund Luxor Capital and Silicon Valley accelerator Y Combinator.
Documents filed by Muzmatch with the UK’s Companies House do not include annual revenues, suggesting that its turnover does not exceed the £10.2m threshold at which companies must declare revenues. more detailed financial statements. Match achieved annual revenues of $2.4 billion in 2020.
Even if Younas wins, he will have lost the majority of legal costs, which are not reimbursed in intellectual property disputes.
“I’ve been very disciplined in the business financially. . . you always have to prepare for the bad days because it always happens,” he added. “We always kept a healthy buffer.”
The two parties reviewed more than 50 million records of the company’s interactions with users between the Muzmatch brand and Match. Three cases were cited by Match as evidence of confusion between the two groups. Match also claimed that Muzmatch uses “match” and “Tinder” in its website metadata to drive traffic to the platform.
Younas told the court that these were standard search optimization strategies to increase the company’s ranking on website search pages, reiterating that “match” was used as a descriptive term for matchmaking and “Tinder” was what Western non-Muslims looked for as a comparison when trying to frame the product in their minds.
“We believe the evidence shows that Muzmatch has unquestionably benefited from its perceived association with Match,” a Match spokeswoman said in a statement. “That’s why Muzmatch has fundamentally redesigned its product and removed references to our services.”
Over the past decade, Match has built a portfolio of over a dozen dating platforms to become the biggest player in the fiercely competitive matchmaking industry. Last year, it bought South Korean social discovery company Hyperconnect for $1.7 billion as it continued to push into new geographies.
However, he regularly faced clashes with competitors. Female-friendly dating app Bumble has in the past accused Match of attempted purchases, cloning and “intimidation” of the company before the two sides settled multiple lawsuits in 2020 over allegations of patent infringement and trade secret theft.
In December, Match agreed to pay the founders of Tinder $441 million to settle a lawsuit over allegations that the group and its former parent company IAC defrauded them of billions of dollars by severely underpricing the dating app. occasional before its acquisition in 2017.
Match sued Muzmatch last year for allegedly copying Tinder’s swipe feature, which was set without acknowledgment of liability and Muzmatch quickly removed the gesture.
Match.com also argued that the Muzmatch font resembled its trademark and both used a heart icon in their logos. Muzmatch argued that hearts are synonymous with dating services and represent love. But in 2016, Muzmatch replaced the heart with a butterfly, which Younas says was because he didn’t want his app to be confused with competitors.
“Someone [once] told me, my problem is that I don’t respect authority,” he said, explaining why he is taking the case to court. “A lot of founders don’t really like having a boss, I like being in control of my destiny.”
That fate is in the hands of Judge Nicholas Caddick of the UK Intellectual Property Court, who will deliver his decision in a few weeks.
Daily newsletter
#techFT brings you news, commentary and analysis on the big companies, technologies and issues shaping this industry’s fastest movement from specialists based around the world. Click here to get #techFT in your inbox.
Comments are closed.