Grindr’s owners may take it private after experiencing financial distress

Grindr’s majority owners are seeking to take the LGBTQ+ dating app private after a stock decline led to a personal financial crisis, according to a report by Semafor.

The owners in question are Raymond Zagy, a former hedge fund manager and American expatriate now based in Singapore, and James Lu, a Chinese-American businessman and former Amazon and Baidu executive. Together they led the acquisition of Grindr from Chinese ownership in 2020 for more than $600 million, then took the app public in 2022 through a blank check merger.

Zage and Lu, who together control more than 60% of Grindr, reportedly pledged almost all of their shares as collateral for personal loans from a unit of Singapore sovereign wealth fund Temasek. After Grindr started to decline at the end of September, those loans became less than collateral (worth less than debt), so the Temasek unit took some shares and sold last week.

Grindr’s stock decline appears disconnected from business fundamentals — profits rose 25% in the second quarter, Semafor notes, though it has seen some executive turnover. There were some investor concerns about tightening spreads as well.

Either way, the pair are now said to be in talks with Fortress Investment Group – in which Mubadala Investment Company now has a majority stake. itself Owned by the Abu Dhabi government – ​​to secure financing for the acquisition at about $15 per share, which would value Grindr at about $3 billion. Stocks jumped after the report.