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24 November 2020
He started his career as a graphic and web designer in 1995 and was involved in launching Hungary’s leading news portal Origo for Hungarian Telekom in 1998. He started his own company Habostorta with a group of co-investors in the year 2000. Habostorta was the first entertainment and dating portal in Hungary that merged into the newly founded Dating Central Europe in 2014.
Peter has been actively involved in developing and growing the online dating business in Hungary and the CEE region ever since.
Dating Central Europe joined the Russmedia family 18 months ago, and for that reason, we wanted to chat with him and see how he sees in retrospective the negotiation, the onboarding process and what it is that a company should be looking for when in search of an investor.
Check out the full audio interview here.
It immediately felt like joining a family. Straightforward & very non-bureaucratic.
We had a business relationship with Russmedia way back, 5-6 years ago, when we had a dating site that operated as a white label solution for certain daily newspapers around the country, and we had three newspaper partners who happened to be Russmedia companies. But that was a different company, different management, but the name stuck with me. The first time we met Russmedia Equity Partners (RMEP) was in 2018, roughly five-six months from the initial meeting to the closing.
The roots of the company and the services were set up 20 years ago. My initial partners sold their shares in 2006, and since then, I am managing the company with a different line of investors. This is the 4th round, and every investor was putting in resources, energy and new ideas.
I started this company in early 2000 with five other friends of mine, who happened to work in different areas: arts, business, finance. We wanted to do something relevant in the Hungarian internet scene, and we started to experiment with content first. In Hungary, there was no gossip content, no tabloid content whatsoever on the web.
We were the first tabloid news website called Habostorta (Cream Cake), and on the side of Habostorta, we also acquired a small dating site. We acquired Randivonal.hu in the year 2000, and based on the experience with Randivonal we started to build a dating portfolio.
My initial partners sold their shares to Holtzbrinck Publishing Group, Germany, in 2006. I remained CEO and a partner. They remained shareholders for eight years and then a Hungarian Private equity fund bought Holtzbrinck’s shares in 2014, and we had to set up a new company. That new company became Dating Central Europe. The main idea was to focus on dating only, so we started to launch new niche services, and we also made big steps into casual dating.
The equity fund was a closed-end fund, so they had to divest their assets by 2020. We started several negotiations with local groups and also a few from abroad, but we made instant friendships with Chris and Eugen. I decided to work with Russmedia Equity Partners, and then the closing happened in May 2019.
It immediately felt like joining a family. Straightforward, very non-bureaucratic environment and I felt that way right after our first visit to Vienna. It was a very down-to-earth approach that came across during the first meetings.
At the end of the day, you realize how much personal relations and first impressions matter. Coming from dating, I can compare this to courting. At the first time, everyone is nervous, and no one knows what to expect. Instincts tell us we made the right choice. What will change after the transaction? Will I still be independent? Can I still make decisions? Will I be overwhelmed with reporting?
The fact that Russmedia has an international umbrella and know-how also played a role. Having known Russmedia’s down-to-earth approach, I had a good feeling that I will get the best of being part of an international company, but also joining a family business.
We had a plan together with the investment manager Chris, a 100-day plan. It included some of the items that came up at due diligence, some of the things that we long wanted to achieve. Developing a new pricing scheme was one of the main projects that we focused on. We felt that pricing had a big promise that we haven’t utilized, a low hanging fruit that we haven’t yet picked. With the help of a third party advisor organized by Russmedia, pricing became a core of our 100 days program. We were growing with double digits before the Russmedia acquisition, but we had to make sure this growth can continue or even accelerate.
We had two big projects in the first year that we had to pull off: rewriting the entire code of Randivonal and pricing.
At the time of the acquisition, we were already in the writing process of the new platform. It was a long project that lasted over two years. The R team has supported us in the late stage of the process, and it was reassuring that we were able to consult with people who knew and understood our problems to the most profound sense.
This was the first experience working with the R team that made us realize what we have internal support with a high understanding of what IT can deliver.
The other project, as I mentioned before, was reforming our pricing scheme. Dating is a fully digital service, where pricing is a crucial part of success. Our old model was a bit too complicated; simplification was potentially a game-changer.
We did a lot of research, conducted many A/B tests before making the move. The extra flow of revenue we immediately earned is a great success for both our teams at DACE and Russmedia.
When you are looking for an investor, you are looking for a partner with compassion and understanding. Empathy also means that they know what you’re going through when good times come when bad times come. Because we all know the business, especially in a difficult year as 2020, you need a partner who understands and supports you with ideas and direction if necessary. I think that’s the key. There are so many investors out there, who are not compassionate, who don’t care, who only care about the excel sheet, but don’t care how you will do it. It’s a binary thing. You have it, or you don’t have it, and I think with compassion, you’re getting a colourful and positive understanding.
To put it into sailing terms: a lot of investors are happy to be around when you are sailing in smooth wind, and the sun is out, and everybody is tanning and having a good time. But you need an investor who knows how to operate in a storm. Who has compassion for you, the manager who is steering in big waves.
Speed is essential, and at RMEP you can influence broad decisions with a phone call. Things are happening very fast; you are where the action is.
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