Match Group dating app subsidiary Tinder Inc. has filed a lawsuit against parent company InterActiveCorp., alleging IAC purposefully undervalued the company to avoid proper payouts to executives.
Tinder’s lawsuit charges IAC, which operates Match Group out of Dallas, of “cooking the books to manufacture a fake lowball valuation of Tinder,” which Tinder said allowed IAC to “steal billions of dollars from the Tinder employees.”
The suit was prepared by Tinder co-founder Sean Rad and a handful of executives. Match Group and IAC have denied the claims, saying in a statement that “with respect to the matters alleged in the complaint, the facts are simple: Match Group and the plaintiffs went through a rigorous, contractually defined valuation process involving two independent global investment banks, and Mr. Rad and his merry band of plaintiffs did not like the outcome.”
Match Group and IAC were referring to Tinder’s valuation at $3 billion from 2017, its most recent. Rad disputes that amount in the lawsuit.
According to the lawsuit, filed Aug. 14, Match Group disclosed during an Aug. 8 earnings call that Tinder has experienced “81 percent year-over-year subscriber growth and a 136 percent year-over-year growth in revenues.” The suit also claims that the 10 plaintiffs own roughly 20 percent of Tinder.
Tinder didn’t provide a valuation in the lawsuit that it believes the company is worth. It did say it expects to generate roughly $800 million in revenue this year.
Tinder is asking for nearly $2 billion in damages.
Tinder representatives did not respond to the Business Journal’s request for further comment.
Tech reporter Samson Amore can be reached at firstname.lastname@example.org or (323) 556-8335. Follow him on Twitter @samsonamore.