LGBTQ social networking platform Grindr is putting on a public show off the New York Stock Exchange (NYSE) as the company goes public following its merger with Special Purpose Acquisition Company (SPAC) Tiga Acquisition Corp. on November 18, 2022 in New York City.
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Traders, bank employees and tourists were not alone in Wall Street on Friday morning. Drag queens were also present.
The troupe of performers, some known for appearing on the competition show “RuPaul’s Drag Race,” performed on a rainbow stage in front of the New York Stock Exchange. It was part of a celebration of LGBTQ dating app Grindr’s public market debut following a merger with blank check company Tiga Acquisition.
Under its new ticker GRND, the company began trading on the NYSE on Friday at $16.90 per share, jumping to a high of $71.51 during the session. The share’s value more than doubled to $36.50 when the market closed.
Grindr CEO George Arison, who has been around for about a month, quickly called the debut a reflection of wider inclusion of LGBTQ people, both within the financial world and beyond.
“It is quite unbelievable that the company whose primary user base is made up of gay and bisexual men, built by and for the LGBTQ population, with an employee base that is also heavy in that cohort of the population, is now going public,” Arison said. “It’s not something that wouldn’t have happened 20 years ago, probably wouldn’t have happened even 10 years ago.”
He said on CNBC’s “Squawk on the Street” Friday, about an hour after representatives for the company rang the opening bell, that the small number of shares available and interest in the company helped drive the initial rally.
Grindr’s party featured a stage for drag queens, including employees, financial services providers, volunteers for LGBTQ community groups, and social media influencers. The New York Stock Exchange was lined with rainbow markers and pride flags in recognition of the event.
Prior to the opening bell, Lynn Martin, president of the New York Stock Exchange, spoke about the importance of an LGBTQ-centered company’s place in the stock market. Indeed, it was only in 2015 when the US Supreme Court ruled that the Constitution guarantees the right to same-sex marriage. Martin was one of many speakers to note the poignancy of the platform holding this celebration in the same neighborhood where the first of several demonstrations took place about 35 years ago to protest for greater awareness of the AIDS epidemic.
“Can you imagine what those 250 people would think if they saw all of us here today?” she said of the protesters. “They would celebrate the fact that freedom of speech allowed them to pave the way for a more just future, a more just society — a society that doesn’t discriminate based on color, race, gender, or who you love.”
‘The power of the app’
The excitement around Grindr’s debut doesn’t diminish the difficulties of the current bear market. Equities in the field of information technology and communication services were particularly hard hit S&P 500 sectors are down 24.5% and 37.8% respectively this year so far.
Grindr’s debut also comes in a year when other dating apps are struggling bumble and Contest with a drop of 31.7% and 64.9% since the beginning of the year. Grindr’s reputation is mixed, with some saying it’s more known for hooking up than dating, but the company markets itself as an online community space.
The app is also being challenged by Motto, a new, privately held platform created by Grindr founder Joel Simkhai. He left the company five years ago.
Arison said Grindr will differentiate itself from the competition by pitching in part that it’s more akin to a social network, given its LGBTQ-themed resources on HIV preventive medicine and monkeypox topics, as well as company data showing the average user is 61 minutes per day. day on the platform.
“We have this very unique engagement with our user base,” he said.
A bear market does not negate the long-term benefits of being public, such as greater hiring potential, the ability to raise capital and potential mergers or acquisitions, he said. In addition to the goals of continuing to expand monetizable offerings such as subscriptions and profile “boosting,” the company could look at adding elements such as travel recommendations to improve user experience, Arison added.
Meanwhile, he said Grindr is excited to share what he calls a strong business model with Wall Street. He said the first half of 2022 brought in $90 million in revenue, showing a 42% growth compared to the same period a year ago. The company also saw a 26% year-over-year growth in adjusted EBITDA.
Arison said Grindr is unique in that it spends only 1% of sales on marketing due to its high brand awareness among its target audience of people who identify as men who are interested in others who identify as men. It had about 11 million active monthly users in almost every country in the world by 2021.
He said any concerns about how homophobia might affect trading performance have been washed away by meetings with investors and others in the financial world who seem interested in the company and how it might trade. Grindr is expected to see a $4 billion total addressable market for all of 2022.
Arison was surprised to see the “understanding of the power of the app for the community and its users, and how much understanding investors have of what the app does for people,” he said. “That was super encouraging and exciting.”
‘The picture is bleak’
Proponents say Grindr’s IPO is undoubtedly a landmark entry into the financial services industry, but it can’t overshadow the many areas where progress is still desperately needed.
Banks have moved en masse to support same-sex marriage and equality, said Michael Maldonado, a communications president for the advocacy group Out in Finance. But Maldonado said financial services can still exclude people who don’t fit into a straight, white and cisgender image, pointing to the difficulties faced by the photo and video-sharing platform OnlyFans, known for its use for monetization. sexually explicit content, is encountered when attempting to disclose.
He pointed to the specific hurdles transgender people face in entering the field and the lack of inclusion of LGBTQ businesses in the environmental, social and governance investment space as two areas that need improvement.
“It says a lot that there were investors willing to tie their name to what this company is known for and to bring it to market,” Maldonado said. But “this isn’t the only thing that’s happening in our industry. A lot of different things are happening to continue the progress you’ve seen within the financial services community.”
There is also a lack of standardized research on the support LGBTQ companies receive in raising finance, says William Burckart, the co-founder of Colorful Capital, which helps these companies connect with capital. He also said these companies may struggle with few investors willing to take the lead, which requires the most risk.
Burckart said micro and macro aggressions continue. He has heard of a female owner who was told to bring a man to be ‘taken seriously’. A trans woman founder was asked “are you really a woman?” in going through the due diligence process with a gender-focused investment company.
“The LGBTQ plus community is kind of a gray space on the economic map of the world,” he said, noting that the blame does not lie with the LGBTQ people themselves. “In reality, it’s kind of like we know the picture is so bleak that we can even see the picture.”
Still, Maldonado and others note that Grindr’s success could lead to it being tracked or indexed by analysts, which would increase its reach. Arison said it adds to a picture of progress that was enhanced this week when the House of Representatives passed a bill that would codify same-sex marriage.
And as Martin prepared an excited crowd to watch Grindr’s leadership ring the opening bell on Friday, she felt the importance of free speech in the stock market.
“The only way we can move a society forward is through a true expression of freedom,” she said. “And that’s why we’re so excited to celebrate Grindr’s IPO today.”