Vancouver’s PlentyOfFish founder catches the big one with $575-million sale

Six years after starting a dot-com business in his apartment, Vancouver’s Markus Frind hadn’t hired anyone or raised a dime of venture capital. In the startup world, that’s usually a bad sign. However, by May, 2009, his site Plentyoffish.com was getting 2.2 billion page views a month and generating millions of dollars in revenues. “Somehow I still managed to create the largest dating site in the world without a single employee and travel the world!” Mr. Frind wrote on his blog last year.

On Monday, Mr. Frind, 37, cemented his status as one of Canada’s most successful entrepreneurs, selling his online dating company to rival Match Group, part of Barry Diller’s IAC/InterActiveCorp., for $575-million (U.S.) in cash. He plans to stay on until at least next year.

Mr. Frind said in an interview that Match has been trying to buy the company for at least a decade, but he never considered selling out until after his daughter Ava was born last year and he decided to “get some work-life balance back. Having a 10-month old daughter, you start measuring time in different increments. Every day you see something’s different – she’s trying to take her first step, or she’s crawling around. Whereas before you measured the company in milestones in terms of the revenue or user growth or some kind of company target.”

The deal is the latest in a series of successful exits for Vancouver startups, including the recent takeovers of online eye-wear seller Coastal Contacts Inc. and smartglasses maker Recon Instruments, but it stands apart for one reason: Because Mr. Frind “bootstrapped” his company all the way – never taking any investments from venture financiers despite repeated entreaties – he doesn’t have to share the proceeds with outsiders, except with the taxman. Asked what he would do with his bounty, Mr. Frind said the company had been generating considerable cash for years, “so anything I could have possibly wanted to buy I’ve already bought.”

Now, there’s hope that Mr. Frind, already an active investor in several local startups, could use some of his bonanza to provide a much-needed boost in a city where there are few active venture-capital funds to help the emerging tech scene. “I think he will invest a lot more and help a lot of businesses,” said Arash Fasihi, founder of Vancouver-based Cymax Stores Inc., an online furniture retailer that recently took an $18-million investment from Mr. Frind and made him a director. Boris Wertz, a prominent Vancouver venture capitalist who counts Mr. Frind among his backers, added: “He’s a smart guy and he knows how to deploy money, and hopefully some of that will flow back into the tech ecosystem.”

Mr. Frind, the son of German immigrants to Canada, launched Plentyoffish in February, 2003, four years after earning a diploma in computer systems from the B.C. Institute of Technology. He started with a rudimentary website, no advertising budget, no business plan and little experience. But his site was free and his dedication to one goal – ensuring people found what they were looking for – made the site a hit almost immediately. “If no one’s successful on your site, no one is going to use it,” Mr. Frind told Vancouver executives in a speech last year. He grew the business on his own, teaching himself about marketing, business development and product, and was still running it out of his apartment when he hired his first developer in 2009. By then, he had 10 million users.

“He was profitable almost from the beginning,” Mr. Wertz said. “He just didn’t need the money.”

At the core of Plentyoffish was an algorithm that Mr. Frind constantly tweaked that used “behavioural match-making” to predict successful relationships. “We can tell exactly who entered a relationship with who and we can use that data to predict who will enter into a relationship with who” – and even predict which couples will break up, Mr. Frind said last year. He constantly monitored traffic, analyzing how many people visited the site, logged on, what they did and whether they came back. “Markus is a machine,” said fellow Vancouver entrepreneur Andrew Reid, founder of Vision Critical. “A lot of his success can be attributed to his drive and focus on data and predictive analytics.”

Plentyoffish, which makes money by selling advertising, now boasts more than 100 million registered users globally and takes credit for bringing together one million couples a year.