Match Group, Parent Of OkCupid And Tinder, Files For IPO

Match.com
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Match Group is hoping to live happily ever after with Wall Street. The company, owner of more than 45 online dating brands including Tinder, OkCupid, and Match.com, has filed for an initial public offering of its stock.

Match Group filed for the IPO of common stock with U.S. regulators on October 16 with an offering amount of $100 million, but that figure is a placeholder that could change in the future. The company is set to operate under the ticker symbol "MTCH" on NASDAQ.

Following the IPO, IAC/InterActiveCorp., which owns Match, would retain control of more than 50% of voting rights under its ownership of Class B shares, which have 10 votes apiece. Match will contract with IAC for “administrative and other services,” but the exact amount of distance between IAC and Match Group going forward is so far unknown.

Here are some of the highlights of Match's SEC filing:

  • Match makes serious money. The company had $888.3 million in revenue and $148.4 million in after-tax profit in 2014. For the first six months of 2015, revenue was $483.9 million and net earnings were $49.3 million. Match might hit $1 billion in revenue this year.
  • Growth is steady, though not explosive. Wall Street wants to invest in technology companies that grow rapidly. Match Group doesn't meet that criterion, but growth between 2013 and 2014 was 10.6 percent. Between 2012 and 2013 it was 12.6 percent. The rate is nothing for the record books, but it's healthy and sustainable.
  • Paying customers make up a surprisingly small percentage of total users. Match Group claims 59 million monthly active users across 38 languages and 190 countries. Of those 59 million, only 4.7 million pay to use the services. The company's income is in the hands of only 8 percent of its customers.

Although the online dating segment seems saturated, the IPO prospectus includes opportunities for future growth. According to the filing, the addressable market is currently about 511 million. That number is expected to grow to 672 million by 2019. Increased adoption of mobile and the Internet, the aging of the population and the increase in the number of singles are all positive trends for the industry.

Of course, there are risk factors too. Cybersecurity is more important than ever, and Match Group admits that it can't guarantee protection from attacks. Match also notes that one of its most important assets, Tinder, could essentially be destroyed if Facebook alters the terms and conditions for connecting with the social network. It remains to be seen if these issues will cause risk-averse Wall Street to balk.

The underwriters for the IPO include J.P. Morgan, Allen & Co. and Bank of America Merrill Lynch.

For more information on the dating services owned by IAC, you can read our reviews on Match.com, OkCupid, and Tinder.