What do we know about the Grindr IPO?
The Grindr IPO took place via a SPAC deal with blank-cheque company Tiga Acquisition Corp. on November 18, 2022 under the ticker symbol ‘GRND’. The newly combined company is now known as Grindr Inc.
SPACs, short for Special Purpose Acquisition Companies, are mergers between two companies. One is a blank-cheque company which raises public funds to eventually merge with another company. Often these blank-cheque companies are set up with the aim of merging into a specific industry or region, but without a specific company as target. SPACs became popular in 2020 and 2021, but many withered out before they could acquire a public company. This has made the successful completion of the Grindr SPAC deal an anomaly.
Grindr stock began trading on the New York Stock Exchange (NYSE) at $16.90 and jumped more than 400% by midday to $71.51. By the closing bell Grindr’s share price fell slightly to $36.50, still a 214% increase from that morning. One month later, Grindr Inc. stock is trading at $5.74, down almost 50% from the pre-SPAC value of Tiga shares, which previously traded under the ticker ‘TINV’.
How much is Grindr worth?
Grindr is worth $0.89 billion as of January 6, 2023. Pre-SPAC Grindr was valued at $1.6 billion and aimed to reach a market cap of $2.1 billion after the merger with Tiga. However, Grindr’s falling share price since November has brought the company well under that goal.
This decline matches that of other public dating app companies like Match Group (MTCH) and Bumble (BMBL), whose valuations fell 31.7% and 64.9% respectively in 2022 amidst a global economic slowdown. How to trade Grindr stock
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What does Grindr do?
Grindr is an LGBTQ+ dating and networking app that sorts users’ personal profiles based on location proximity to their GPS location. The 100 nearest profiles are arranged in a grid and display additional information when selected. Users can send text messages and share photos, voice memos, video calls, and their precise location with one another.
In 2021 Grindr had 10.8 million monthly active users who spent an average of 61 minutes per day on the app, 80% of whom were under 35.
Grindr has made several forays into original content. In 2017 it launched a short-lived digital magazine, ‘INTO,’ that folded after 17 months. Next, Grindr released a miniseries titled ‘Bridesman’ released in-app and on YouTube in April 2022. It’s unknown if Grindr plans to pursue additional content streams.
How does Grindr make money?
Grindr makes money through in-app ads and tiered subscription services.
- Grindr XTRA costs $19.99 per month and removes ads, allows users to view up to 600 nearby profiles at once, offers advanced filters when sorting through profiles, and other features
- Grindr Unlimited costs $39.99 per month and provides all the benefits of Grindr XTRA plus an unlimited number of profiles users can view and additional chat features
As of May 2022, Grindr boasts 723,000 paying users, with 11 million users total spending on average 61 minutes per day on the app.
Grindr has gotten into hot water for selling location data to in-app advertisers. Although the company claims to have stopped in 2020 after several fines and investigations – including a $7 million fine by Norway – the Wall Street Journal reported in May 2022 that location data collected by Grindr on its users from 2017 to 2020 remains on the market.
A spokesman for Grindr, Patrick Lenihan, told the Wall Street Journal that Grindr has now sacrificed ad quality and received lower revenue since reducing the user data shared with marketers.
Is Grindr profitable?
Exact information on the profitability of Grindr is not available. The company reported revenue of $147 million and $77 million in EBITDA in 2021, up 30% and 51% respectively from 2020. For 2022, the app predicts an increase in revenue growth between 35-40%.
In Grindr’s third-quarter financial report, the company listed a year-to-date revenue of $140.5 million and a year-to-date net loss income of $4.3 million. Its year-to-date adjusted EBITDA is $65.8 million.
What is Grindr’s business strategy?
While neither Grindr nor Tiga Acquisition Corp. have spoken on specific plans for the future of the company, Tiga CEO Raymond Zage has stated that he sees the possibility for a “meaningful expansion of its monetisation within a continuously growing market.” Tiga and Grindr also seek to drive engagement and retention through improved user experience and attract new users through expanded offerings post-acquisition.
Grindr has stated it plans to use the funds generated from the SPAC deal to pay down debt and further grow its business. Grindr Inc CFO Vanna Krantz has stated the company plans to review subscription packages and ad strategies in the coming year.
Who are Grindr’s competitors?
Grindr’s competitors include other popular dating apps such as Tinder, Hinge and Bumble. All of which have experienced declining stock prices in the last year. Bumble is down 69% after going public in February 2021 at $76 per share, now trading around $23.
Match Group, which owns both Tinder and Hinge, is down nearly 67% compared to December 2021 with a share price of $42. The conglomerate claims roughly 100 million monthly users across its dating platforms, while Bumble averages 40 million and Grindr just 11 million.
Tinder, Hinge and Bumble all cater primarily to straight audiences. Other queer dating apps rivalling Grindr include HER, Lex and Feeld, which all focus primarily on lesbian women and queer or polyamorous users. Grindr meanwhile caters primarily to gay, trans and bisexual men.
Who owns Grindr?
Grindr has changed hands several times since its founding by tech entrepreneur Joel Simkhai in 2009. In January 2016 Grindr sold a 60% stake to the Chinese video game development firm Kunlun Tech Co Ltd., which later purchased the remainder of the company in January 2018.
However, by March 2018 the Committee on Foreign Investment in the United States informed Kunlun that its ownership of the app posed a national security risk. This halted Kunlun’s plans of an IPO for Grindr as the company began seeking a new buyer.
Two years after US regulators encouraged the divestiture, Kunlun sold its entire 98.59% stake to the US-based San Vicente Acquisition LLC for $608.5 million. The remaining 1.41% of the company was held by senior management and core employees at Grindr.
Post-SPAC, current Grindr equity holders maintain about 78% of the company.
Grindr board of directors
Grindr’s board of directors was organized ahead of the IPO to include a majority of LGBTQ+ identifying members. The board also includes current and former CEOs of Grindr and Tiga, Grindr’s previous chairman James F. Lu and the previous director J. Michael Gearon Jr.
- James F. Lu – Chairman
- George Arison – Grindr Inc CEO and Director
- Raymond Zage – Previous Tiga Acquisition Corp CEO and Director
- J. Michael Gearon – Director
- George Arison – Director
- Daniel Baer – Director
- Gary Horowitz – Director
- Maggie Lower – Director
- Nathan Richardson – Director
- Meghan Stabler – Director