Key Takeaways
- Two of Grindr’s top shareholders have offered to take the app private for nearly $3.5 billion — a figure that is still slightly below market expectations.
- Like many dating apps, Grindr has been unpredictable in the stock market, but it stands out for showing sustained revenue growth.
- Going private would allow Grindr to explore new forays into healthcare and AI without answering to the short-term pressures of the stock market.
With dating app fatigue at an all-time high, leading platforms are considering major internal shake-ups. Case in point: Grindr has received a buyout offer of $3.5 billion from its two top shareholders, which would make Grindr a private company after three years on the New York Stock Exchange.
This eye-popping offer comes from two Grindr shareholders, George Raymond Zage III and James Fu Bin Lu (who has been chair of the board since 2020), who together own more than 60% of the company’s outstanding shares. They propose paying $18 apiece for each remaining outstanding share.
Even with the big “b” following the buyout offer, the proposal is surprisingly still considered to be “slightly below expectations,” according to Reuters.
“Below expectations” pretty much sums up the current state of the dating app industry. There are fewer loyal users and no guarantees, making short-term goals even harder to achieve. Many see this as a time to grow — to explore re-invention.
Internal shake-ups are one way to signal reinvention. If Grindr accepts the offer, Zage and Lu will gain more control over the app’s future.
Shareholders like Zage and Lu are looking for innovative ways to achieve sustainable growth, even if it means saying goodbye to life as a publicly traded company.
Grindr’s Stock is Unpredictable, But its Revenue is Strong
Zage and Lu are no strangers to high-stakes shake-ups at Grindr. The duo led Grindr’s more than $600 million acquisition from its previous owner, Beijing Kunlun Tech Co., in 2020, taking the company public in 2022.
“I have been a consistent buyer of shares in Grindr since listing, buying over $200 million of shares on the public market and am also willing to contribute additional equity to this deal,” Zage said in a press release.
He and Lu both want to bring the company into its next phase: “We are strong believers in the long-term outlook for the company,” he said. Going private would give Grindr the chance to foster long-term growth without answering to the short-term demands of the stock market.
It’s worth noting that Zage is based in Asia, the region that, according to Straits Research, is the fastest-growing region for the online dating market, particularly for niche groups.
Zage and Lu saw interest from stakeholders, namely debt and equity investors, to fund the acquisition. There seems to be an internal motivation to reevaluate Grindr’s future growth away from the prying eyes of the public — and from Wall Street.
After all, Grindr’s stock price has been on a roller coaster since its 2022 debut.
The financial analytics platform Trefis illustrates how Grindr’s revenue has experienced sustained growth while its year-end stock price has zigzagged from $8.78 in 2023 to $17.84 in 2024, then back down to its current price of $15.06.
Stock market variation is to be expected, but complete zigzags?
When focusing on reinvention, shareholders want to project strength, not weakness. Grindr’s volatility on the stock market is a direct contrast to the app’s steady revenue growth.
Grindr’s sustained revenue is particularly interesting to shareholders, as it suggests that the app’s specialized features continue to show profitability with its niche demographic.
Going Private Spells Freedom from Stock Market Pressures
Although it’s still a dating app (and hookup app) through and through, Grindr’s priorities now include real-world interactions, community building, and accessible safety measures.
The company has made clear its intent to extend into nondating niches, including healthcare, in recent months. Woodwork is Grindr’s first foray into telehealth-style healthcare, and the app has also invested heavily in AI.
Going private allows Grindr to explore these new fields — well, privately, away from the public scrutiny inherent to the stock market.
This doesn’t mean that Grindr has avoided the industrywide dating app downfall, however.
Growth is growth, but Grindr’s growth may not be strong enough for investors, hence the buyout offer that would take the company private. In other words, Grindr still has an uphill battle, even with a potential billion-dollar buyout and growing revenue.
But due to its niche demographic, Grindr has a better chance at reinventing itself and energizing its user base. It’s unclear how exactly Grindr will change if the deal goes through, but Zage and Lu reportedly intend to involve CEO George Arison in the decision-making process.
“We hope to have an active and friendly dialogue with our CEO George Arison and the board to find the best path forward for the Company, our employees and investors,” Zage said in the press release.
No news yet on whether this deal will go through, but one expert told Reuters that the deal is “the most likely to cross the finish line.”
