DATING website firm Cupid, hailed as one of Scotland’s most promising technology companies, saw tens of millions of pounds wiped off its value yesterday as it launched an investigation into claims of staff posing as members.
The probe follows allegations in a newspaper in Ukraine, where many of the Edinburgh-headquartered firm’s staff are based, after a female reporter went undercover to secure a job interview with the company’s “motivation team”.
Cupid has been the subject of a BBC investigation this year into claims, which it denied, that fake profiles were created to encourage members to take out subscriptions.
The share price of Cupid – headed by serial technology entrepreneur Bill Dobbie and behind brands including UniformDating.com, Flirt.com BeNaughty.com and IndianDating.com – plunged after a financial blogger circulated copies of the article from the Kyivpost newspaper.
The shares more than halved within hours, knocking £55 million off its value and closed down 57 per cent at 49p.
Mr Dobbie, 54, saw almost £10m wiped off the value of his personal stake in the company, which has 54 million members across its network of sites.
The Ukrainian newspaper report claimed that during a job interview in the country, a reporter was told that the role involved posing as a female user of the dating site and encouraging male users to buy memberships.
In response the company issued a statement saying it did employ a motivation team of 24 people working across three shifts, covering a range of websites and companies.
It said the team does not communicate with free members, but that it does communicate with new paying subscribers to “help them get the most out of the site”.
Cupid said it has now commissioned an independent audit by one of the “big four” accounting firms and will report the findings to the market as soon as possible.
The company said that the audit team would also address an allegation in the article that members who have signed on a three-day trial membership are encouraged through messages created by Cupid employees to move to a full subscription.
Just three weeks ago, Mr Dobbie said his confidence in the business he founded was “as strong as ever” as he took advantage of the depressed share price to build his stake by almost £1m.
Cupid employs some 25 staff in Castle Street, Edinburgh, and late last year moved to larger premises in the city centre which gave it the capacity to double its workforce over time.
The company was originally called EasyDate but changed its name after a legal challenge from EasyJet.
Mr Dobbie was not available for comment yesterday.