Grindr finds its Wall Street match
Two acronyms we wrote a lot in the Trump era were SPAC and CFIUS, referring to the boom in blank-check acquisition companies and increased scrutiny of tech deals on national security grounds. Now they've had a merger of their own.
Driving the news: Grindr, the popular LGBTQ+ dating app, has agreed to go public at an implied $2.1 billion enterprise value, via a SPAC — two years after its Chinese owner (Kunlun Group) was forced by CFIUS to sell the business for just over $600 million.
- The forced divestiture came after reports that Grindr engineers in Beijing had access to U.S. user data, including private messages and HIV statuses.
Inside the deal: The Hollywood-based app is said to have briefly considered an IPO, but ultimately launched a SPAC-off that included around half a dozen serious suitors.
- The winner was Tiga Acquisition, whose chairman and CEO Raymond Zage was part of the group that bought Grindr in 2020.
- A Grindr spokesperson says that Zage has no voting shares or board seat with Grindr, and that he recused himself from any sell-side involvement.
- But he’s all over the buy-side. Not only via his existing stake, as the current owners will hold around a 78% stake after rolling over $1.6 billion worth of stock, but also via the SPAC and then a $100 million forward purchase agreement from his private investment firm Tiga Investments (the merger doesn’t include any outside PIPE financing).
By the numbers: Grindr reports $77 million of adjusted EBIDTA on $147 million in revenue for 2021, up from $51 million on $113 million in 2020.
- For comparison, Bumble reported $765 million of 2021 revenue.
- Grindr's actual profit in 2021 was $5.1 million, up from a $13.1 million loss the year prior.
The bottom line: Grindr first announced plans to go public back in 2018, when it was still owned by Kunlun. Now it's finally for a date with Wall Street, after a very circuitous journey.