Grindr shares soar as LGBTQ dating app debuts after SPAC merger

Grindr shares soar as LGBTQ dating app debuts after SPAC merger
Grindr shares soar as LGBTQ dating app debuts after SPAC merger

LGBTQ social networking platform Grindr is holding a public offering outside of the New York Stock Exchange (NYSE) as the company goes public following its merger with special purpose acquisition company (SPAC) Tiga Acquisition Corp. on November 18, 2022 in New York. .

Spencer Platt | Getty Images

Traders, bank workers and tourists weren’t the only ones around Wall Street Friday morning. Drag queens were also there.

The group of artists, some of whom are known for their appearances on the competition show “RuPaul’s Drag Race”, performed on a rainbow stage in front of the New York Stock Exchange. It was part of a celebration of the public markets debut of LGBTQ dating app Grindr following a merger with blank check company Tiga Acquisition.

Under its new symbol GRND, the company began trading on the NYSE at $16.90 per share on Friday, surging to a session high of $71.51. The stock’s value more than doubled to $36.50 at market close.

Grindr CEO George Arison, who has been in the role for about a month, was quick to cite the debut as a reflection of broader LGBTQ inclusion, both in finance and more broadly.

“It’s a pretty amazing thing that a company whose primary user base is gay and bisexual men, built by and for the LGBTQ population, with an employee base that’s also significant in this cohort of the population, now be public,” Arison said. “It’s not something that wouldn’t have happened 20 years ago, probably wouldn’t have happened even 10 years ago.”

He said on CNBC’s “Squawk on the Street” on Friday about an hour after company officials rang the opening bell that the small volume of stock available and interest in the company contributed to its first rally.

Grindr’s party featured a stage for drag queens, with attendees that included employees, financial services professionals, volunteers for LGBTQ community groups and social media influencers. The New York Stock Exchange was lined with rainbow markers and pride flags in recognition of the event.

Before the opening bell, New York Stock Exchange President Lynn Martin spoke about the importance of an LGBTQ-centric company’s place in the stock market. Indeed, it wasn’t until 2015 that the United States Supreme Court ruled that the Constitution guaranteed same-sex marriage rights. Martin was one of many speakers who noted the emotional nature of the platform holding this celebration in the same neighborhood where the first of multiple protest demonstrations for greater awareness of the AIDS epidemic occurred there about 35 years ago.

“Can you imagine what those 250 people would think if they saw us all here today? she said of the protesters. “They would celebrate the fact that through freedom of speech they were able to pave the way for a more equitable future, a more equitable society – a society that does not discriminate on the basis of skin color, race, sex or whoever you like. “

“The power of the app”

The excitement around Grindr’s debut doesn’t lessen the difficulties of the current bear market. Information technology and communication services stocks were hit hard, with S&P500 sectors down 24.5% and 37.8% respectively since the start of the year.

Grindr’s debut also comes in a year where other dating apps are struggling, with Bumblebee and Match plummeting by 31.7% and 64.9% since the start of the year. Grindr’s reputation is mixed, with some saying it’s known more for hookups than dating, but the company markets itself as an online community space.

The app is also being challenged by Motto, a new unlisted platform created by Grindr founder Joel Simkhai. He left the company five years ago.

Arison said Grindr will separate itself from competitors by explaining, in part, that it’s more like a social network given LGBTQ-themed resources on topics related to HIV preventive medicine and monkeypox, as well as company data that shows the average user spends 61 minutes a day on the platform.

“We have this very unique engagement with our user base,” he said.

A bear market does not negate the long-term benefits of being public, such as increased hiring potential, the ability to raise capital and potential mergers or acquisitions, he said. In addition to goals of continuing to expand monetizable offerings like subscriptions and profile “boosting,” the company could consider adding things like travel recommendations to improve user experience, Arison added.

Meanwhile, he said Grindr is excited to share what he calls a strong business model with Wall Street. He said the first half of 2022 saw revenue of $90 million, showing 42% growth from the same period a year ago. The company also posted 26% year-over-year growth in adjusted EBITDA.

Arison said Grindr is unique in that it only spends 1% of its revenue on marketing due to its high profile among its target audience of people who identify as men who are interested in others who identify as men. It had around 11 million active monthly users in almost every country in the world in 2021.

He said any concerns about how homophobia could impact business performance have been brushed aside by meetings with investors and others in the finance world who seem interested in the business and how. it could be negotiated. Grindr is expected to see a total addressable market of $4 billion for all of 2022.

Arison was surprised at “the app’s understanding of the power for the community and its users, and how well investors understand what the app does for people,” he said. “It was super encouraging and exciting.”

“The picture is dark”

Proponents say Grindr’s IPO is undoubtedly a milestone for inclusion in financial services, but it can’t overshadow the many areas where progress is still needed.

Banks have taken massive action to support same-sex marriage and equality, said Michael Maldonado, communications manager for advocacy group Out in Finance. But Maldonado said financial services can still exclude people who don’t fit a straight, white and cisgender image, pointing to the difficulties faced by photo and video sharing platform OnlyFans, known for its use to monetize sexually explicit content when trying to make it public.

He highlighted the specific barriers that transgender people face when trying to enter the field and the lack of inclusion of LGBTQ-owned businesses in the environmental, social and governance investment space as two areas. which still need to be improved.

“It says a lot that there were investors willing to tie their name to what this company is known for and help market it,” Maldonado said. But, “that’s not the only thing happening in our industry. There are a lot of different things happening to continue the progress you’ve seen in the financial services community.”

There’s also a lack of standardized research on the support LGBTQ-owned businesses receive when trying to raise capital, said William Burckart, co-founder of Colorful Capital, which helps connect such businesses to capital. He also said these companies can struggle with few investors willing to step up, which requires the most risk.

Burckart said the micro and macro aggressions continue. He heard of a female landlord who told him she should bring a man with her to be “taken seriously”. A transgender founder was asked “are you really a woman?” during the due diligence process with a gender-focused investment firm.

“The LGBTQ plus community is kind of this gray space on the economic map of the world,” he said, noting that the fault is not with LGBTQ people themselves. “In reality, it’s kind of like we know the image is dark to the extent that we can even see the image.”

Still, Maldonado and others note that Grindr’s success could lead to it gaining analyst or potentially indexed coverage, which would increase its reach. Arison said it adds to a picture of progress that has improved this week with the House of Representatives passing a bill that would codify same-sex marriage.

And as Martin prepared a cheering crowd to watch Grindr management ring the opening bell on Friday, she felt the importance of free speech in the stock market.

“The only way to move a society forward is through a true expression of freedom,” she said. “And that’s why we’re so excited to celebrate Grindr’s IPO today.”

. shares grindr rise arrow so dating app LGBTQ makes debut after merge SPAC

. Grindr shares soar LGBTQ dating app debuts SPAC merger

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