According to Bloomberg, the LGBTQ+ dating app will go public through Tiga, a blank check firm or Special Purpose Acquisition Company (SPAC).
They’re combining to form a combined entity with a $2.1 billion valuation, giving Grindr access to $384 million in funds to be used for debt payments, growth areas, and new ventures.
In an interview, Grindr Chief Financial Officer Gary Hsueh told the media organization that the company had previously been approached by several SPACs.
He explained that it ultimately chose the SPAC route over a traditional IPO because it makes more sense. “It had certainty, which is even more important today than it was a year ago when the market was different,” Hsueh said.
According to Bloomberg, SPACs became popular in recent years after the pandemic made traditional IPOs much riskier than usual.
They provide better returns and protections and may make it easier to become a public company. However, the market has recently become oversaturated, and at least one analyst has told CNBC that the SPAC bubble is about to burst.
Grindr’s revenue is currently primarily derived from subscriptions, though it does earn some money from advertisements.
It remains to be seen whether a recent report that it sold user data will have an impact on its future earnings: The Wall Street Journal reports that Grindr location data has been for sale for at least three years, putting users’ privacy at risk.