Business Technology

Tuesday 23 September 2014

Tinder 'valued at $5bn' after Diller raises stake

Published 13/04/2014 | 19:07

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Is the Tinder app the holy grail of dating?
Is the Tinder app the holy grail of dating?

Most people who turn to Tinder hope it will spark romance, or at the very least a bit of fun flirtation. But now the mobile dating site has sparked something altogether different.

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Bloomberg claimed this weekend that the company had been valued at $5bn, after Barry Diller's IAC/InterActive Corp, Tinder’s majority shareholder, allegedly paid $500m for an additional 10pc stake.

The company, which already owns a slew of dating websites such as Match.com and OK Cupid, was said to have acquired shares from Chamath Palihapitiya, a California-based venture capitalist.

However, Mr Palihapitiya quickly dismissed the report as inaccurate. “I sold my stake but [the] value was much less,” he said on twitter, without disclosing the actual price. IAC also dismissed the $5bn valuation, saying the $5bn valuation was “nowhere near the truth”.

News of a deal still stoked existing fears of a tech bubble.

Tinder only launched in August 2012, but it has become a cultural phenomenon amongst 20-something and 30-somethings in the US and Britain. It doubled its daily users from 5m to 10m in December alone, and last month reached its billionth “match”.

However, despite the millions of users, Tinder has yet to make any money. However, its 27-year-old founders, Sean Rad and Justin Mateen, have indicated that they could introduce adverts, or turn it into a “freemium” model, charging a subscription for premium services.

The service allows users to scan photographs of nearby members, and either reject them by swiping the screen left, or express their interest by swiping right. If two members like each other by swiping right, they are a “match” and are allowed to communicate.

IAC invested in the app as a defensive move, to help ward off the competition it faced from other free dating sites.

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