The Download: Dating app Hinge plans move to New York next spring


Justin McLeod, right, and Bennett Richardson, co-founders of dating app start-up Hinge, in August. The company is departing the District for New York City in the spring. (Jeffrey MacMillan/For The Washington Post)
December 5, 2013

Hinge seemed to be a prime example of the sort of economic development that District officials and tech enthusiasts want to see in the city’s technology sector.

The dating app has grown to 10 employees. It raised millions in venture capital while housed in start-up hub 1776 . And it was preparing to move into its own digs this spring, filling more office space.

There’s just one problem: The office space is in New York.

“That’s more a factor of the industry we’re in,” founder Justin McLeod told the crowd at an Atlantic Live event. “We’re consumer Internet, and there’s just not a strong consumer Internet ecosystem here. There’s a much stronger one in New York and San Francisco.”

To McLeod’s point, the largest consumer Internet companies in the Washington region have either shrunk their local operations (AOL) or struggled to maintain growth and achieve profitability (LivingSocial).

“Investors and advisors have definitely encouraged us to move up there,” McLeod said in an interview. “It’s been something that’s on our mind for a long time. Since the beginning, when I hired people, I wanted to know whether they would be willing to move to New York.”

D.C. has seen technology start-ups in a variety of sectors form here only to decamp for the larger and more cash-rich tech meccas of San Francisco or New York City, including real estate Web site HotPads.com and app software firm Socialize.

Tech Cocktail, a media company lead by D.C. tech advocates Jen Consalvo and Frank Gruber, moved its headquarters to Las Vegas earlier this year.

Each of those departures came despite the efforts of Mayor Vincent C. Gray (D), who made a concerted effort to grow the tech sector as an alternative economic driver to the federal government.

Add Hinge to the list.

“If I were going to do it again I wouldn’t do it differently,” McLeod said in an interview. “It’s not that D.C. is the wrong place and New York is the right place. D.C. is the right place to get started and New York is the right place to scale.”

New leader for Osiris

Columbia-based Osiris Therapeutics, a company that uses stem cells to treat various illnesses, announced last week that chief executive C. Randal Mills would step down for personal reasons after 10 years at the helm of the company.

The firm’s chief operating officer, Lode Debrabandere, will serve as president and chief executive pending board approval. He has been with the firm since 2006.

Mills will become a strategic advisor to the company.

“Now that we have successfully transformed Osiris into a profitable company with a strong balance sheet and a solid pipeline, I look forward to contributing to the company’s continued progress in a strategic role,” he said in a statement.

Osiris posted a profit of $47,000 for the first three quarters of the year, compared to a net loss of $1.7 million compared to the same nine-month period of 2012. The firm’s drug to treat acute graft versus host disease and Crohn’s disease, Prochymal, is in third-phase clinical trials.

Spending big

Cyber Monday marked the biggest day for online spending in history, according to Reston-based ComScore, with retailers raking in a whopping $1.74 billion from consumers looking to take advantage of deep discounts.

It was the second time this year that online sales have surpassed $1 billion in a single day. The first? Black Friday. Stores pulled down $1.19 billion on that day from the Web alone, even as many of them opened doors earlier than ever on Thanksgiving.

The weekend after Thanksgiving serves as the start of the holiday shopping season, a make-or-break period when many retailers collect a disproportionate amount of their annual revenue. Online shopping plays a larger role in that with each passing year.

“Any notion that Cyber Monday is declining in importance appears to be completely unfounded as its strong year-over-year growth rate of 18 percent resulted in yet another record for online spending in a single day,” ComScore Chairman Gian Fulgoni said in a news release.

The consumerism creep was stronger than ever this year. Cyber Monday became a week-long event for many major retailers, including Amazon, Target, and Bed, Bath and Beyond. Some even started deals online days before they began in stores.

In total, retailers made $5.29 billion worth of sales online between Thanksgiving and Cyber Monday. That marks a 22 percent increase compared to last year’s total of $4.33 billion.

Bits and bytes

Arlington Economic Development and Amplifier Ventures have formed a public-private partnership designed to connect Northern Virginia’s entrepreneurs and federal agencies.

The initiative, called Tandem NSI, aims to introduce the government to tech firms beyond traditional federal contractors while also exposing entrepreneurs to opportunities to commercialize national security technology developed in federal and university labs, according to a news release.

Money for the program comes from the Federal Action Trust Fund, a Virginia fund that supports “initiatives that allow the commonwealth to modernize and grow its economy in light of changes in federal budgets and priorities.”

Gaithersburg-based DioGenix raised $3.2 million from new and existing investors last week to further vet a test the company developed to detect multiple sclerosis in patients.

Cyber Monday brought the best day of sales on record for District-based deals company LivingSocial. The firm reported a 69 percent increase in online sales and 40 percent increase in mobile revenue compared to the same day last year.

steven.overly@washpost.com

Steven Overly covers the business of technology, biotechnology and venture capital in the Washington region for The Washington Post and its weekly Capital Business publication. In that capacity, he has written about start-up struggles, investment trends and major drug discoveries.
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