LGBTQ+ dating app Grindr will go public in a deal with blank check company Tiga Acquisition Corp. (NYSE: TINV), in an effort to grow the dating app.
Pursuant to the May 9 deal, the combined company will have a post-transaction value of $2.1 billion. The cash proceeds raised will consist of Tiga Acquisition’s $284 million cash in trust and up to $100 million in cash equity. Any net proceeds will help pay off debt and help with growth initiatives. Furthermore, current Grindr equity holders will roll approximately 78% of their existing equity into the combined company.
According to the documents, Grindr is profitable and has “untapped global TAM with attractive user demographics.” Reportedly, its core market keeps growing and the app only has about 2% of the market. As stated in the filings, it has $147MM non-GAAP revenue in 2021, representing 30% growth from the prior year. It has 53% 2021 adjusted EBITDA with an average of 50% adjusted EBITDA margins.
“Grindr is the leading platform focused on the LGBTQ+ community for digital connection and engagement,” Jeff Bonforte, Chief Executive Officer of Grindr, said in a press release. “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 were still just beginning our monetization and growth journey. Grindr is well positioned to be a public company and will continue to expand the ways it serves the LGBTQ+ community, from products, services to the philanthropic and advocacy work done through Grindr 4 Equality.”
As stated in the filings, in 2021, Grindr had 10.8 million monthly active users and in December 2021, the average daily user spent about an hour on the dating app. Additionally, in December 2021, there were 723,000 paying users; this is an increase of 31.5% from 2020. In terms of demographics, 80% of profiles are 35 years old or younger.
“Bringing Grindr to the public markets with TAC furthers our mission to connect the LGBTQ+ community,” James F. Lu, Chair of Grindr’s Board of Directors, said in a press release. “This transaction is a milestone event, not only for our iconic company, our people, partners, and investors, but also for the community we serve around the world.”
According to the filings, the transaction will help Grindr improve user experience to help drive engagement and retention, use the industry playbook to increase monetization and add additional revenue avenues. Grindr will also expand its offerings to grow its user base.
“The business combination with Grindr represents a tremendous opportunity to invest in critical social infrastructure for a traditionally underserved LGBTQ+ community,” G. Raymond Zage, Chairman and CEO of Tiga Acquisition Corp. said in a press release. “Grindr has established itself as the primary social network for LGBTQ+ people, enabling meaningful expansion of its monetization within a continuously growing market. We are excited to bring this diverse and thoughtful board together with the talented Grindr team to grow the business and deepen its commitment to the LGBTQ+ community.”
Upon completion, Grindr Group LLC will be named Grindr Inc. It will continue to be led by CEO Jeff Bonforte, until a new LGBTQ+ community CEO is found, after which, Bonforte will be an advisor to Grindr.
The board will consist of G. Raymond Zage, Chairman and CEO of Tiga Acquisition Corp., current Grindr CEO Jeff Bonforte and James F. Lu will continue to serve as chair of the board. Current investor and former Atlanta Hawks owner, J. Michael Gearon, Jr. will also remain on the board. Additionally, as stated in the filings, with the help of global executive search firm Audeliss for the other board members, “Grindr has organized a majority LGBTQ+ identifying Board of Directors for its public entity.”
The deal is expected to close in the second half of 2022, subject to regulatory and stockholder approval as well as other customary closing conditions.
Cooley LLP is serving as legal counsel to Grindr and The Raine Group LLC is serving as financial advisor. Milbank LLP is serving as legal counsel to Tiga Acquisition Corp.
