Controversial ‘sugar daddy’ dating app attracts funding


In perhaps the most apt tech investment ever, a startup that made an app for sugar daddies to meet young women announced today that it has just taken cash from a rich man.

Darren Chan, CEO and founder of the controversial Sugarbook app, isn’t saying how much money is involved or who the benefactor is, but he sees it as a vote of confidence in a service that has been hit with a lot of social pushback in conservative Malaysia and Singapore.

With its “Chat. Negotiate. Meet.” catchline, the dating app doesn’t sugarcoat the transactional nature of the dates. “Enjoy generous allowances, luxurious gifts, exotic vacations, and shopping sprees across the globe,” says the website in a section labelled “sugar baby perks.”

“When I first started, nobody had any idea what I was doing, not even my partner who lived with me under the same roof,” Chan tells Tech in Asia. “She knew I was onto something – I was interviewing at least 30 developers on a daily basis continuously for two months. It was only after a year that my family and friends found out about Sugarbook from an online media video interview that went viral.”

“But thankfully, I’m blessed to have a very supportive family that believes in my endeavor,” adds the 32-year-old founder.

A taste of honey

Chan started the website in January 2017, and an app came out about eight months later.

It proved controversial almost immediately, with Desmond Lee, Singapore’s Minister for Social and Family Development, warning that police will “keep a close eye” on the app for any evidence that it’s procuring sexual services for payment.

The government “collectively objects” to apps that “commoditize and devalue” relationships, the Minister added.

But Sugarbook is “just a social networking platform,” contends Chan. “I do not see the need for authorities to be in touch – nor have they been in touch.”

He is also defensive about the criticism, saying that Sugarbook became controversial “mainly because of how the media perceived sugar dating.” But moving forward, he thinks that his company is “in a much comfortable position to navigate through and address these misconceptions.”

He feels that people across Southeast Asia will come around to the idea of compensated dating as their understanding of the practice grows.

The app has a few safety features to keep things orderly and try ensure its female users are safe.

Sugarbook has “12 moderators working around the clock” who scout for signs of users engaged in prostitution or exploitation, explains Chan. There’s also a “verified profiles” badge where users are “required to submit their identification documents – e.g. passport, identity card, together with a selfie/photo of themselves to apply.”

Although what the startup encourages is legal, compensated dating is not all designer handbags, iPhones, and exotic vacations, as the app intimates. The reality is that it’s partly made up of vulnerable women engaged in part-time sex work. Plus there’s evidence that compensated dating in other social media apps ensnares minors.

No obligations

Chan feels it’s better if people realize “that most relationships are transactional.” This has been the case for a very long time, he claims.

“People tend to date a person because of what they are able to get out of each other, such as consensual sexual needs, emotional support, or even financial support,” he argues. “That being said, sugar babies are not obligated to have sex. They are not prostitutes – in fact, they are goal-empowered individuals who know what they want in life.”

Chan continues, “Just like you and me, sugar babies have the freedom to choose who they want to be with in a relationship. Being a sugar baby is not a profession or a business transaction – it’s a lifestyle choice.”

Sugarbook now has 300,000 members, Chan says, but declined to specify how many are active users or current subscribers. Its users span 60 countries, with Malaysia, the US, Singapore, and the Philippines taking the first four spots.

The startup generates revenue from optional monthly subscriptions, with packages available for “sugar babies” and “sugar daddies.” A three-month VIP program costs US$42.95. Chan touts 15-fold revenue growth in 2018, though he’s keeping specific numbers under his hat.

“Female college students are given free premium accounts as long as they register using their university email or show proof of enrollment,” notes a review site called Dating Scout. “This makes it easier for students to connect with their sugar daddies.”

Second startup

Born in Malaysia, Chan graduated from RMIT University in Melbourne, Australia. The entrepreneur then had a brief stint working for his father in manufacturing before setting up Gigfairy, his first startup.

Gigfairy, which allowed people to book live music performers, was acquired in early 2016 by the entertainment wing of AirAsia.

After his first venture, Chan started thinking about creating a dating app. He knew immediately that he had to make it different from the likes of Tinder and

“So when I came across a study that suggested that 40 percent of online dating people picked financials to look at first before considering any relationship, I knew we found our niche and that we were going to create a platform and community for mutually beneficial relationships based on money,” he recalls.

Worth six digits, the new funding round is from an angel investor “with an investment banking background from one of Hong Kong’s largest venture capital firms,” reveals Chan.

Sugarbook will use the cash to bankroll efforts related to product development, scale, and infrastructure as well as expansion to three or four more countries by 2020. On the agenda for this year is wooing more sugar babies and daddies in Hong Kong and Bangkok.

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