By
Mayowa Adebajo
November 8th, 2023
The Grindr SPAC public deal includes an initial $284 million from Tiga and an additional $100 million in forward purchase agreement.
Popular LGBTQ+ dating app Grindr recently announced its decision to go public via a $2.1 billion special purpose acquisition company (SPAC) merger. Grindr stated that its existing shareholders would control a 78% ownership stake of the company following the merger. However, the popular dating app did not disclose the identities of its existing shareholders.
The deal values Grindr at 27 times its adjusted 2021 earnings before debt commitments, including interest, taxes, depreciation, and amortization of $77 million.
Coming two years after the $620 divestiture of Grindr by China’s Kunlun Tech, the deal is interesting because of Tiga Investments chief executive Raymond Zage. The CEO, who has a 41% controlling stake in the consortium that acquired Grindr, will act on both sides of the transaction. A Reuters report states that Zage is still a Grindr investor.
Details of Grindr Public Deal
Grindr’s SPAC merger will raise $384 million for the LGBTQ+ dating app as it becomes a publicly-traded dating app. The outlay includes $284 million in cash from Tiga and up to $100 million in a forward purchase agreement. In addition, Grindr’s merger with the blank check acquisition firm will reportedly conclude in the second half of the year.
Speaking on the public deal, Grindr chief executive Jeff Bonforte expressed optimism about the platform’s future. Bonforte said:
“Grindr is the leading platform focused on the LGBTQ+ community for digital connection and engagement. We have a near ubiquitous global brand in the community we serve, impressive scale, best-in-class user engagement metrics and adjusted EBITDA margin, and we’re still just beginning our monetization and growth journey.”
With this deal, Grindr now also joins Match (Tinder owner) and Bumble as one of only a few publicly-traded dating apps.
According to a copy of the merger agreement, Grindr and Tiga expect their deal to require clearance from the Committee on Foreign Investment in the United States (CFIUS). The community scrutinizes deals and foreign investments for potential national security risks.
Future of Grindr?
As the new emerging company structure takes shape, Bonforte and Grindr chief operating officer Rick Marini will step down. Before assuming their current roles, both were part of the investment firm Catapult Capital that competed to buy Grindr. Eventually, both parties were able to come to an agreement and plans for replacing the CEO and CFO are ongoing.
According to Grindr’s investor presentation, the company had $147 million in sales in 2021 and $77 million in adjusted EBITDA. In addition, last year there was an average of 11 million active monthly users. Grindr forecasts sales growth or this year at 35% to 40% compared to 30% growth in 2021.
Grindr initially launched in 2009 as a free iOS mobile app that displayed profiles of nearby men. The app also had a premium subscription without any ads, and increased each user’s access to 200 nearby men from the 100 available on the free version.