Will Grindr Soon Be Up For Sale?

  • Friday, May 29 2015 @ 06:37 am
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Infamous hookup app Grindr may quietly be looking for a hookup of its own: a hookup with a buyer.

Word on the street is that the LA-based company has hired Raine Group LLC to advise on a possible sale. Bloomberg reports that “the sale process is early and no deal is assured,” so for the moment Grindr is keeping details under wraps.

Joel Simkhai founded Grindr in 2009 with $5,000. Since then, the explosively popular app has gained more than 5 million users in 192 countries. It claims to be the biggest male mobile social network in the world, and has become a bona fide pop culture phenomenon.

Oddly, despite its meteoric rise to the top of the gay dating app heap, Grindr remains self-funded with no outside investors. Revenue comes from a premium subscription service called Grindr Xtra, a paid upgrade that offers increased functionality and eliminates advertising for $12 per month.

In 2011 Simkhai launched Blendr, a dating app for both men and women that uses similar geolocation technology. So far it has yet to soar to the heights reached by its predecessor.

The problems Grindr and Blendr currently face are not unique. The dating industry is massive and cutthroat. Research by IBISWorld found 3,924 dating services in the US alone, which add up to revenue of about $2 billion. Competition is in ample supply, and it isn't easy for paid services to go head-to-head with free options.

The business model itself offers a special set of challenges. Dating services struggle to retain customers and sustain revenue growth for an amusingly obvious reason: because ideal use of the service means no more need of it. A success story ends in finding love, settling down, and never needing to date again.

A short-term solution to the problem, at least for Simkhai himself, is a sale. IAC (InterActiveCorp) could perhaps be a likely buyer, as it controls the majority of the online dating market in America through ownership in platforms like Tinder, OKCupid, and Match.com. Grindr would be a powerful addition to IAC's already-powerful lineup.

It is not known how – or even if – a sale would impact users, but it's probably safe to assume drastic changes aren't on the way for an app that's already had so much success. Although with more money and muscle behind it, who knows how much growth could be in store for Grindr?