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How Andrey Andreev built Badoo a billion-pound social network... on sex

Jun 22 '16 | By La Afrique Media | Views: 677 | Comments: 0

This article was taken from the May 2011 issue of Wired magazine. Be the first to read Wired's articles in print before they're posted online, and get your hands on loads of additional content by subscribing online.

It's a 120-million-member social network that's adding over 300,000 users a day, with more than 4.3 million daily photo and video uploads, and seven billion monthly page views. It hasFacebook's fastest-growing app, with 570,000 new daily users, making it the third-biggest app of all after FarmVille and CityVille. Hugely profitable, it's forecast to generate hundreds of millions of dollars this year, and is being aggressively courted by venture-capital firms valuing it in the billions. And it's run from London by a secretive Russian serial entrepreneur who has steadfastly refused to be interviewed or photographed. Until now.

The world's largest social network

Badoo is the world's largest social network that you probably haven't yet heard of. Run from 800-square-metre loft-style offices in Soho, it is brilliantly effective at providing one simple and universally compelling service: hooking up members according to their profile pictures and location. "Chat, flirt, socialise and have fun!," implores the home page, alongside photos of prospective friends such as Terri, 21 ("Wants a candlelit dinner"), and Christopher, 25 ("Wants wake up with a girl" [sic]). Sign in, and a message declares that "204,516 girls [or guys] near you are looking to meet a guy your age!".


Explain your intentions (the pull-down menu's suggestions include "to talk about sex", "to get a massage", "to flirt") and Tatyana, Oshrit or Gary might just give you access to their stash of private photos.

Still barely registering in Britain or the US, the free-to-use network -- on the web and via smartphones -- is a mass phenomenon in Brazil (14.1 million members), Mexico (nine million), France (8.2 million), Spain (6.5 million) and Italy (six million). Relying on word-of-mouth rather than any marketing spend, it has cracked the internet's eternal conundrum: how to persuade users to pay hard cash in a world drowning in free digital services and content, by charging members each time they want to boost their visibility to others searching for a date.

A year after Badoo's 2006 launch, when it had 12 million members, Russia's Finam Technology Fund bought a ten per cent stake for $30 million, valuing it at $300 million (this year Finam will realise an option for a further ten per cent at a higher valuation). Today, A-list investors such as Sequoia and Accel are courting the business and there is talk of an initial public share offering. "Cracking the Anglo-Saxon market will probably give us double to triple today's reach," says Bart Swanson, recruited as CEO last September, having expanded Amazon into Europe and run EMI in France. "The opportunity for people discovery [through Badoo] is a horrendously large market -- it's a confluence of social, proximity, mobile, and it's extremely local. The basic mechanism of what Andrey has developed is genius -- just like Google with its AdWords, it's people paying for self-promotion. And it works."


Mysterious Andrey

Andrey is Andrey Andreev, originally from Moscow but based in London for the past six years, who founded Badoo on a string of other highly profitable Russian internet businesses: Mamba, SpyLog, Begun. Andreev, a youthful 37 with a cherubic smile below a floppy fringe, has so far eluded media attention: Russian Forbes last year called him "one of the most mysterious businessmen in the West" (it also reported his original name as Andrey Ogandzhanyants, under which the SpyLog.net domain was registered). We were introduced in January by Israeli investor Yossi Vardi at Burda's DLD conference in Munich, which Vardi co-chairs, and later met in London. (Vardi has no stake in Badoo.) And then in mid-February, alone in an office belonging to Freud Communications, Andreev agreed to share his story. It has been a busy few days. Andreev explains that Michael Moritz, the legendary Sequoia investor who took early stakes in Google andApple, has just flown in from Palo Alto to meet him; he has also been meeting Kevin Comolli of Accel's London office. Moritz declined to speak to Wired, but Comolli -- whose investments include Playfish, Kayak and Getjar -- calls Andreev a "genius" with whom he would like to work. "Badoo is a social phenomenon," Comolli says. "It's explosive growth, viral, it's playful, it seems consistent with offline social interaction but in this hypervirality mode that only the internet has enabled. The secret sauces in companies like this are so nuanced, and the difference between getting it wrong and right lies only with these special people like Andrey. He's created something very powerful." So why has Andreev remained silent? "I love to focus on making things rather than exploring myself," he says quietly and precisely, his 5' 8" frame constantly moving in agitated discomfort at being quoted on the record for the first time. "I don't feel that it helps to make money or make business."

And now? "I feel Badoo is ready for me to identify with. Because it works, it grows like crazy. And people love it."


There is another unspoken reason: with an IPO being considered, the company needs to raise awareness to maximise the valuation being floated by investors and bankers (currently being discussed at "around $2 billion", according to Andreev). The business is printing money: revenues and profit are growing by "double-digit percentages" each month, he says. "We see bankers everywhere. We are like celebrities."

Badoo explodes

Badoo launched in late 2006 in Spain, where Andreev was then living, as a conventional photo-sharing website. "We assumed that the 'meet new people' idea wouldn't work there -- Spanish girls are like princesses, you couldn't touch them, you had to meet their parents first before inviting them to the cinema," he says. The site wasn't generating revenue, but numbers were growing sharply: the 2007 Google Zeitgeist list of fastest-rising search terms listed "Badoo" second, just below "iPhone". In 2008, Andreev decided to test his assumptions of Spanish women and as an experiment refocused the site on meeting new people. "And the girls didn't leave. At that time, France was growing fast, Italy was.

Then one day we discovered we had 30,000 registrations in Turkey


[that day]. What happened? Was it a hacker attack or scammers? No, someone wrote an article about us. It's as if all the users jumped on the bus and went there. Bang -- in two months, suddenly we have a Turkish market with a million members." Today the overall gender ratio is 45 percent female, 55 per cent male (in Brazil and Poland women outnumber men); 86 percent of users are aged 18 to 34.

Andreev introduced some simple premium services. You could pay a dollar or a euro to "rise up" the search results, and so attract greater attention. You could pay again to have your profile photo more widely visible across the site. He introduced virtual gifts to buy for your prospective date. "No one's pushing you to spend money, but if you want to attract more users, you have to pay," he explains. "You pay to advertise yourself. If you want something to go faster, you pay. And some people pay tens of times every day to rise up." By the end of 2009, the site had 48 million registered users -- a fifth of whom, then CEO Neil Bryant said at the time, were paying to boost their profile.

Badoo mobile "Then we had the idea of mobile -- how to meet people nearby,"

Andreev says. "We understood that people could meet each other in a big town, but how much more exciting to see who's sitting next to you in a café? Or you can just walk past a nightclub and see who you can pick up before you get in. It's another opportunity to hook up random people for adventure. We're talking about real life, real time. We know this girl is 500 metres from here now."


Badoo Mobile launched last summer on the iPhone, and in March on

Android. Within weeks, with barely any marketing, the iPhone app was the number-one social-networking app in France; after eight months, it had been downloaded 1.5 million times. Andreev sees proximity as key to the business's future. Even desktop computer users can share their location by downloading an app that accesses Wi-Fi networks, IP addresses and other data points. "If you're sitting at home and someone's walking with an iPhone nearby, we know the distance between you. We can also show the iPhone user that you're nearby.

So it works for everyone."


The Badoo impact

Some join Badoo to find a relationship. Lucy, 19, told Wired she created an account after moving from Liverpool to London for university. "I had split up with my boyfriend due to distance," she says. "But it is hard to meet up with boys my type on my uni course. My friend Josh said he uses Badoo to look for guys and that I should try it, so he came over armed with some alcohol and I signed up."

A number of users sent Lucy "weird and inappropriate messages" (an offer to star in a porn movie; questions about her feet), but there were two men with whom she enjoyed chatting regularly. "Then the third one, I met up with. He's 20. I felt comfortable meeting up with him as it was in public, and he told me everywhere he was taking me. We've been on four dates and it's going well."

Others are open to more casual encounters. Edita, 35, from Madrid, says she makes friends, but "you can find a weekend roll" too. Rafe, also from Madrid, has done just that. "After nine months I started chatting with a guy. We talked for a month and one day he gave me his number. The next day he came to my house in the morning. I was alone. Within an hour we were in my bed naked."

source: Wired

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