The rise and rise of the American Sugar Daddy

Online firms make millions by putting financially challenged young women in touch with rich men

There is nothing particularly subtle about the sales patter. "We make mutually beneficial relationships," goes one pitch. "We are where the attractive meet the affluent," claims another. A third bills itself: "An upscale community of beautiful women seeking wealthy men."

The service being brokered is as old as the institution of arranged marriage. But the medium it's being offered through isn't. The pitches are aimed at wealthy male "sugar daddies" who, in the jargon of lonely hearts ads, WLTM very much younger women.

In America's booming online dating market, few sectors are hotter than so-called "sugar daddy" sites, which help rich men to make "arrangements" with attractive and financially needy younger women. Between them, these specialist sites now account for 10 per cent of the entire industry. That's no small beans, given that in the US the online dating business now generates profits estimated at $700m ($442m) per year and, according to the polling firm GlobeSpan, has helped just over one in five Americans to find their life partner.

The "sugar daddy" trend began in 2006, when the entrepreneur Brandon Lee founded a website called SeekingArrangement. Though it now boasts dozens of copycats, he claims to have a attracted a million members worldwide. The older, male subscribers pay a fee of $50 per month; young women can join for free.

Mr Lee says that business has been boosted by a mixture of the faltering economy, which has increased the number of cash-hungry young members, and the robust number of baby boomers who, often with pharmaceutical assistance, are continuing to enjoy active sex lives.

"We are also noticing an increased number of college students signing up," he says. "When I started the site, roughly one in four of what I call my 'sugar babies' were at college; now, that figure is closer to four out of 10. University fees have got more expensive, and loans are harder to come by so, for many young women, getting a sugar daddy becomes an increasingly attractive option."

Mr Lee says that business has also been helped by the number of headline-prone celebrities, of both genders, taking up with "sugar babies." Though Hugh Hefner remains the most legendary of these, Mr Lee cites Jim Carrey, Madonna and Jennifer Lopez as recent high-profile converts to the trend.

Although many of his website's members are wealthy (he claims to have two of the "Forbes top 10" richest Americans as clients), Mr Lee – who employs a staff of 14 and has his head office in Las Vegas – says that increasing numbers come from middle-income brackets.

"Being a sugar daddy isn't so much about being wealthy as about just being generous," he says. "It's all about an attitude. Sure, we have some billionaire clients. But we also have plenty of members who earn $60,000-70,000 a year, and maybe have only a couple of grand to spare each month. Well, if they have the right character, that's still enough."

The trend became a national talking point this week after CBS showed a documentary about a 22-year-old student from Miami who uses Mr Lee's site, and others, to find gentlemen companions willing to subsidise a monthly allowance of between $10,000 and $20,000.

"The lesson here [is] ask and you shall receive," she announced. "They have given me cars, trips, jewellery. These guys will take you out and they will court you. They support you financially. My dreams came true after my parents stopped supporting me when I was 18."

Various men she has met on the site have paid her college fees in return for exclusive relationships. "They see you struggling; they want to help you. Whether or not it is an arrangement, it is still a relationship."

Some viewers thought the lifestyle outlined in the documentary bordered on prostitution. The student, who kept her identity secret, insisted otherwise, although she admitted that most of her "sugar daddy" relationships haven't lasted more than a few months.

Mr Lee, however, insists that his site can help people find true love. "We have had plenty of clients who have entered long-term relationships with people they met on the site," he said. "It can work."

As if to prove a point, he said that he married his own "sugar baby" a fortnight ago. "I'm 41, she is 26 and I pay for everything," he said. "It works."