**Grindr, the dating app, plans to go public through a merger with a special purpose acquisition company (SPAC), which the company said would bring the company's implied valuation to $2.1 billion** As part of the deal announced on Monday with tiga acquisition Corp, a special-purpose acquisition company, the app will earn $384 million, a large part of which will be used to repay Grindr's debt.
The company said in a statement that the funds would be used to "support growth areas, launch new efforts and continue our purposeful work to promote the best interests of the global dating community".
If the transaction is completed, its valuation is estimated to be more than three times that of the acquisition of Grindr by San Vicente acquisition for us $608.5 million in 2020.
Grindr said it was looking for a new CEO to replace Jeff bonforte, its founder and current boss, and had been discussing with potential candidates "who has rich experience in technology and finance and can spend time as the executive leader of a listed company".
The company said bonforte would remain at the helm until a successor was found, after which he would act as an adviser.
The company said it had 10.8 million users in 2021, of which 723000 were paid subscriptions. Subscription revenue accounted for the majority of the company's revenue, with a year-on-year increase of 30% to US $147 million in 2021.
Grindr doesn't stand out in the highly competitive dating industry. Match group, with a market value of $20 billion, and Bumble, which went public last year, dominate the industry. Match group has a large portfolio of dating companies, including tinder and hinge.
Nevertheless, Grindr has been successful in targeting specific dating groups, and its valuation has grown rapidly from $151 million obtained by Beijing Kunlun tech when it first acquired 61.53% of the company in 2016 (Kunlun wanwei sold Grindr in 2020).
The deal came as Grindr was facing privacy issues. Earlier this month, the Wall Street Journal reported that a digital advertising group had previously collected and sold some user location data.
Grindr's decision to go public through a merger with a special purpose acquisition company comes at a difficult time for the market and greater pressure from regulators. The recent proposal by the securities and Exchange Commission to increase the potential liability of underwriters has disturbed major banks such as Goldman Sachs and Citibank, both of which have withdrawn from the market.
The deal does not include the so-called pipe - short for private investment in public equity, which means that private investment or mutual fund buys a company's common stock at a price lower than the market value at that time - which was once regarded as a necessary condition for a special purpose acquisition of the company. Pipe investors have provided billions of dollars of financing, which has played a role in approving transactions and boosted the prosperity of special purpose acquisition companies.