- Grindr is going public through a merger with Tiga Acquisition Corp. (NYSE: TINV). These are the details.
Grindr, the #1 social network for the LGBTQ+ community, announced that it has entered into a definitive agreement to merge with Tiga Acquisition Corp. (NYSE: TINV) (TAC), a special purpose acquisition company. And upon completion of the deal, the combined company will be named Grindr Inc.
G. Raymond Zage, Chairman and CEO of TAC, will serve as a member of the Grindr Board, along with Jeff Bonforte, current CEO of Grindr, and James F. Lu, who will continue as Chair post-transaction. Current investor and former Atlanta Hawks owner J. Michael Gearon, Jr. will also remain on the Board post-transaction. And with the help of Audeliss, a global Executive Search firm specializing in Diversity, Equity, and Inclusion, Grindr has organized a majority LGBTQ+ identifying Board of Directors for its public entity, including: CEO of Shift Technologies Inc., George Arison; former United States Ambassador to the Organization for Security and Co-operation in Europe, Daniel Baer; senior partner at Simpson Thacher, Gary Horowitz; CMO of Hootsuite, Maggie Lower; Investor and Tech Executive, Nathan Richardson; and SVP of Marketing and Communications at BigCommerce, Meghan Stabler.
Founded in 2009, Grindr is an iconic global brand, with strong growth, serious runway, and significant cost controls, running a business committed to serving the LGBTQ+ community. The company is profitable and has a large and untapped global TAM with attractive user demographics. Its core market is growing rapidly, while the business is still at only ~2% penetration. Grindr is the clear brand leader in its space as a global LGBTQ+ platform with unparalleled user engagement and industry-leading privacy practices. Its hyperlocal, location-based interface surfacing real-time connections drives a powerful engagement engine, rapidly growing its users, and enabling user-motivated product innovation.
User base by the numbers:
– 85% brand awareness
– 10.8M Monthly Active Users in 2021
– 61-minutes average daily time spent per user in Dec 2021
– 723K Dec 2021 Paying Users, a 31.5% increase compared to the prior year
– 80% of profiles are 35 years old or younger
– Highly profitable business in early innings of monetization journey:
– $147MM non-GAAP revenue in 2021 – 30% YoY growth
– 53% 2021 Adjusted EBITDA margins
– An historical average of 50% adjusted EBITDA margins
– Annual sales and marketing spend in 2021 of ~1% of revenues
– A growth-focused product runway:
– Improve core user experience to drive engagement and retention
– Leverage industry playbook to drive monetization and add revenue streams
– Expand product offerings to attract new users and serve additional use cases
Grindr 4 Equality
The company launched Grindr 4 Equality (G4E) in 2012, with a mission to promote safety, health, and human rights for LGBTQ+ people around the world through collaborations with advocacy groups in various countries. G4E leverages the Grindr app’s global reach and leadership to empower local LGBTQ+ activists, spread information, and empower users in the fight for LGBTQ+ rights. The company also funds innovative projects through G4E aimed at improving the welfare of the LGBTQ+ community, particularly in regions where protections are either lacking or nonexistent, such as Russia, Egypt, and India. In India, the company worked with the Indian gender and sexuality organization, Varta Trust, and Chennai-based not-for-profit Solidarity and Action Against the HIV Infection in India (SAATHII), to develop an innovative and one-of-a-kind LGBTQ+ resource database and online HIV test center location guide for the country. Through G4E, the company works with various groups worldwide to make HIV testing more accessible, encourage voting, and fight homophobia, biphobia, and transphobia.
G4E is a key way for us to connect with and serve the LGBTQ+ community, especially in parts of the world where LGBTQ+ people are still highly marginalized. In line with this transaction, the company will look to create a more formal, independent governance and financial structure around G4E, to accelerate donations and efforts to help the community around the world, working synergistically, and not competitively, with the great advocacy organizations already working on behalf of LGBTQ+ people everywhere.
Company Management
It has been the long-standing goal of Grindr’s current ownership and management that Grindr be led by members of the LGBTQ+ community. 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 executive leadership role at a public company. Subject to the completion of these discussions and entering into an agreement, the company will update the prospectus/proxy statement to disclose the name and biographical information of the new Chief Executive Officer. Bonforte will continue to serve as Grindr’s Chief Executive Officer until a new Chief Executive Officer is able to join Grindr, at which point Mr. Bonforte will transition to an advisory role.
Transaction Terms & Financing
The combined company will have an estimated post-transaction enterprise value of $2.1 billion. Cash proceeds raised will consist of TAC’s approximately $284 million of cash in trust and up to $100 million in additional cash equity from a forward purchase agreement. Net proceeds raised from the transaction will be used to satisfy debt obligations and fund planned growth initiatives.
Current Grindr equity holders will roll approximately 78% of their existing equity holdings into equity of the combined company (assuming no TAC shareholder redemptions). The business combination has been unanimously approved by the boards of managers and directors of both Grindr and TAC. The business combination is expected to close in the second half of 2022, subject to regulatory and stockholder approvals, and other customary closing conditions.
KEY QUOTES:
“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. 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.”
– Jeff Bonforte, Chief Executive Officer of Grindr
“Bringing Grindr to the public markets with TAC furthers our mission to connect the LGBTQ+ community. 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. We are grateful for the resilience, courage, and creativity that are some of the LGBTQ+ community’s unifying characteristics. Lastly, we are thrilled to work with Ray Zage and Ashish Gupta and the entire TAC team, and appreciate their confidence and support in this important journey.”
– James F. Lu, Chair of Grindr’s Board of Directors
“The business combination with Grindr represents a tremendous opportunity to invest in critical social infrastructure for a traditionally underserved LGBTQ+ community. 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.”
– G. Raymond Zage
“I am humbled to be asked to join Grindr’s Board of Directors. Since inception, Grindr has played a vital role in connecting the LGBTQ+ community. It is an honor to help safeguard and nurture this incredible brand, and I am excited to work with my fellow Directors and the whole Grindr team to expand our product offerings and further support the community around the world, especially in places where it is most difficult to be LGBTQ+.”
– George Arison
“Grindr is iconic. It plays in the space between dating service and social network, and acts as connective tissue for large segments of the LGBTQ+ community. There is more we can do; connection technology is dynamic and fast moving, and the opportunities for Grindr are enormous. On behalf of my community, I can’t wait to work with this board and the impressive folks at Grindr to show up for even more LGBTQ+ people.”
– Maggie Lower
