Match Group to Pay $441 Million to Tinder Founders in Settlement

Match Group has agreed to pay $441 million in a settlement with some of Tinder’s former employees, shutting down the lengthy trial before closing arguments, according to Reuters.

The plaintiffs included Tinder co-founder Sean Rad among other former employees, and the trial got heated between Rad and former IAC CEO Barry Dillard. Prior to the trial, emails from former Match Group CEO Gregg Blatt were released to the public, showing that he tried to woo talented people into key roles at the company with a higher stock valuation compared to what he told the Tinder employees who had options to exercise.

According to The Daily Mail, emails revealed that Blatt valued the dating app at nearly $12 billion in 2016, more than a year before Match Group valued Tinder at only $3 billion as Sean Rad and other employees were forced to exit the company. Rad and the other plaintiffs who filed the lawsuit claim Blatt purposefully devalued the stock in their negotiations, citing the emails as evidence. 

Match Group owns dating app Tinder, and they along with IAC were the defendants in the lawsuit.

The plaintiffs were given stock options in 2014 but weren’t allowed to exercise them because at that point Tinder was a private company. However, the lawsuit they filed in 2018 that led to this past month’s trial stated that IAC (which owned Tinder’s parent company Match at the time, which later became Match Group), deliberately prevented Rad and co-founders Justin Mateen and Jonathan Badeen from selling their stock until specific dates, when the stock options could be independently valued.

In addition, according to Reuters, IAC merged Tinder into Match at the time, but Tinder’s board of directors was not aware of this and did not agree to the move. The company also canceled the future dates proposed for exercising options, according to the 2018 lawsuit.

The company, which is now worth billions and expected to continue to grow, agreed to pay the settlement and discontinue the trial, and according to Reuters, will pay from cash on hand.

The court had dismissed the plaintiff’s claim that the merger was not lawful according to Tech Crunch, but not other claims. Match Group agreed to pay the plaintiffs $441 million and in return the plaintiffs will dismiss all claims on trial and in arbitration related to the 2017 Tinder valuation.

It was an unusual move after Match Group spent millions defending themselves and argued the lawsuit was “meritless.”

Both parties released the following statement about the settlement: “The parties are pleased to announce that they have settled the valuation lawsuit presently on trial in New York Supreme Court and the related valuation arbitration.”