Is Internet dating a match for investors? – CNBC
In addition to its size, Match has another asset as it tries to lure investors: Tinder
The cash cow of Match is its traditional subscription business, with offerings starting at around $20 a month. But the user growth is with Tinder, the free and wildly popular mobile dating app, known for having members swipe left or right, depending on their interest.
Tinder’s tagline is “friends, dates, relationships, and everything in between.” In other words, it’s as much for a fun night out as it is for finding a significant other.
“Tinder is the ultimate wild card for investors,” BTIG analyst Brandon Ross wrote in a report this week. “Management acknowledges that Tinder’s user and revenue growth will be somewhat difficult to predict, with greater variability in forecasts the longer you look out.”
A Match representative didn’t respond to a request for comment.
Match priced at $12 per share Wednesday night, and raised close to $400 million, making it one of the biggest tech IPOs, behind First Data, according to Ipreo. Payments company Square is also scheduled to sell shares Thursday night in what is likely to be the fifth biggest tech deal of the year, though it was priced at $9, below the expected price.
IAC, the Internet conglomerate chaired by billionaire Barry Diller, will still own 86 percent of Match’s stock after the separation. Proceeds of the offering will be used to pay back debt.