Grindr Faces Potential Take-Private Deal Amid owners’ Financial Strain
Los Angeles, CA - LGBTQ+ dating app Grindr is exploring a potential buyout following a recent stock decline that triggered financial difficulties for its majority owners, Raymond Zage and James Lu, according to reports. The move comes after a series of transactions that saw the app transition from chinese ownership to a public listing.
Zage,a former hedge fund manager based in Singapore,and Lu,a Chinese-American entrepreneur and former executive at Amazon and Baidu,led the $600 million acquisition of Grindr in 2020,navigating U.S. national security concerns surrounding its previous Chinese ownership. They subsequently took the company public in 2022 through a special-purpose acquisition company (SPAC) merger.
Recent market volatility has put pressure on the pair, who collectively control over 60% of Grindr’s shares. semafor reported that Zage and Lu had pledged a meaningful portion of their shares as collateral for personal loans from a Temasek Holdings unit.A slide in Grindr’s stock price at the end of September led to those loans becoming undercollateralized, prompting the Temasek unit to seize and sell some of their holdings last week.
Despite a 25% increase in profits during the second quarter, Grindr has experienced some executive turnover and investor concern regarding narrowing margins.
now, Zage and Lu are reportedly in discussions with Fortress Investment Group, which is majority-owned by Mubadala Investment company – itself owned by the government of Abu Dhabi – to secure financing for a buyout at approximately $15 per share. This would value Grindr at around $3 billion. Following news of the potential deal, Grindr shares jumped in trading.