The LGBTQ+ dating app is going public through a blank check firm or Special Purpose Acquisition Company (SPAC) called Tiga, Bloomberg reports. They're merging to form a combined entity with a $2.1 billion valuation, which will give Grindr access to $384 million in funds to be used for debt payments, as well as to support growth areas and to launch new endeavors.
Grindr Chief Financial Officer Gary Hsueh told the media organization in an interview that the company had been approached by several SPACs in the past. It ultimately chose the SPAC route instead of a traditional IPO, he said, because it makes more sense. "[I]t had certainty and that’s even more important today than it was a year ago when the market was different," Hsueh explained.
As Bloomberg notes, SPACs became hot over the past couple of years after the pandemic made traditional IPOs much riskier than usual. They offer better returns and protections and could provide an easier route to become a public company. However, the market has become oversaturated of late, and at least one analyst told CNBC that the SPAC bubble is bursting.
At the moment, Grindr's revenue mostly comes from subscription, though it does earn some money from ads. It remains to be seen if a recent report that it sold user data would affect its future earnings: According to The Wall Street Journal, Grindr location data was for sale for at least three years, putting users' privacy at risk.