Tiga SPAC to merge with San Vicente-owned Grindr

Tiga, which describes itself as a long-term investor, was established by Raymond Zage, formerly head of Farallon Capital’s Asia business. It has launched five SPACs and made various direct investments, including joining KKR in the acquisition of office space provider The Executive Centre last year.

Tiga Acquisition raised USD 276m in November 2020 and had a 12-month window in which to secure a business combination. It secured a six-month extension in November 2021, with the sponsor agreeing to purchase additional warrants.

The merger with Grindr will be completed at an enterprise value of USD 2.1bn. SPAC shareholders will own 14% of the merged entity. The sponsor, which typically receives a 20% interest in the SPAC – not the merged entity – for a nominal sum post-listing, will hold 3%. Tiga committed an additional USD 100m through forward purchase agreements, which will give it 5%.

Existing shareholders in Grindr, who are rolling over their interests, account for USD 1.59bn of the overall USD 2.15bn in equity. They will take 78% of the merged entity.

Grindr is controlled by San Vincente, which completed a USD 560m acquisition in mid-2020. One-third of the deal was senior debt, one-third deferred equity, and one-third traditional equity. James Lu, an investor who has worked in China and the US, made a sizeable personal contribution. The rest of the capital came from a handful of family offices and high net worth individuals.

Grindr had been put up for sale because the previous owner, Beijing Kunlun Tech, had to unwind its position at the request of US regulators concerned that Chinese agencies could use the personal data to blackmail US citizens. This was one of the first examples of the Committee on Foreign Investment in the US (CFIUS) using its voiding right in more aggressive manner.

Anything involving certain critical technologies and sensitive personal information is subject to closer scrutiny, ostensibly to curb the global technology ambitions of Chinese investors.

San Vincente knew that whoever sought to buy Grindr from Kunlun would be closely scrutinised. “CFIUS left no stone unturned. The process took six months, a solid six months of back and forth,” Lu told AVCJ at the time. “We are 100% American and we had 100% of the funding in place. All the controlling voters are Americans who hold or have held national security clearances."

Founded in 2009, Grindr claims to be the global brand leader in LGBTQ+ social networking, with 10.8m monthly active users in virtually every country in the world. These users, of whom four in five are 35 years old or younger, spent an average 61 minutes per day on the platform in December 2021. As of the same date, Grindr had 723,000 paying users, up 31.5% year-on-year.

Revenue reached USD 147m in 2021, up from USD 113m a year earlier, while adjusted EBITDA rose from USD 51m to USD 77m. The company moved from a net loss of USD 13.1m in 2020 to a net profit of USD 5.1m in 2021, according to an investor presentation.

“The business combination with Grindr represents a tremendous opportunity to invest in critical social infrastructure for a traditionally underserved LGBTQ+ community. Grindr has established itself as the primary social network for LGBTQ+ people, enabling meaningful expansion of its monetisation within a continuously growing market,” said Zage, chairman and CEO of the SPAC, in a statement.

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• Topics
• Southeast Asia
• Greater China
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• SPAC
• Tiga Investments
• TMT