Gay dating app Grindr to float in $2.1bn deal

theguardian.com:

Grindr plans to float through a merger with a so-called Spac investment company in a deal that values the gay dating app at $2.1bn (£1.7bn).

The app will receive $384m as part of the deal with Tiga Acquisition Corp (TAC), the Singapore-based special purpose acquisition company (Spac) – also known as a “blank cheque” shell company that raises money first and seeks businesses to buy later.

Grindr, which launched in 2009 and specialises in dating among the LGBTQ+ community, had 10.8 million monthly active users last year. Of these 723,000 paid for one of its subscription services, called Xtra and Unlimited, with paying users up 31% over 2020.

The average amount of time users spend on the app each day hit 61 minutes in December and 80% of profiles on Grindr are 35 years old or younger – with just 11% aged 41 or older – according to the company’s investor presentation. The company’s revenues rose 30% last year to $147m – and it expects growth of between 35% and 40% this year – and made $77m in adjusted profits.

The valuation is more than triple the $608m that owner San Vicente Acquisition paid for Grindr two years ago. Grindr said that as part of the deal, which will result in existing shareholders owning about 78% of the company, the chief executive, Jeff Bonforte, would step down.

“It has been the longstanding goal of Grindr’s current ownership and management that Grindr be led by members of the LGBTQ+ community,” the company said in a statement announcing the deal. “Working together, Grindr’s board and management have identified and been in discussions with a potential new chief executive officer candidate who would bring a depth and breadth of experience across technology, finance, and management, including time spent in an