Tinder co-founders swipe left on valuation and sue current owners

15 Aug 2018164 Views

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Tinder apps. Image: Alex Ruhl/Shutterstock

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Tinder co-founders allege they are owed money.

The co-founders of Tinder as well as former and current executives are suing the hook-up app’s current owners, alleging they have been denied billions of dollars they are due.

They say they were promised a big payday if they achieved the goal of bringing the company to a certain value. However, they allege they were deliberately prevented from cashing in stock options.

The suit, filed in a court in New York, is seeking at least $2bn in damages from Match Group and its parent company, InterActiveCorp (IAC).

They are basing their dispute on stock options received by Tinder co-founder and former CEO, Sean Rad.

The plaintiffs allege that despite contractual agreements, when it came to being paid, they were effectively stood up through various corporate jigs and reels.

The group includes Rad, Justin Mateen and Jonathan Badeen as well as several executives given stock options in the dating app company as part of their compensation in 2014. Combined, the stock options accounted for 20pc of Tinder.

They allege that they were only allowed to exercise their options and sell only to IAC and Match on specific dates in 2017, 2018, 2020 and 2021.

Ghosted

The plaintiffs claim that incomplete financial information valued Tinder at $3bn in 2017, below what they believe the company was worth.

Tinder is expected to bring in about $800m in revenue this year, valuing the company at 75pc higher than the revenue number used to calculate its value in 2017.

IAC and Match merged the platform into Match and cancelled the future dates for exercising options, with the plaintiffs alleging they did so without the consent of Tinder’s board of directors.

“Through deception, bullying and outright lies, IAC-Match stole billions of dollars from the Tinder employees,” the plaintiffs said in a statement.

IAC and Match said the allegations in the complaint were “meritless”, adding: “We intend to vigorously defend against them.”

Tinder apps. Image: Alex Ruhl/Shutterstock

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com