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Dating App Grindr Is Going Public Via SPAC Deal
Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
Queer dating app Grindr is planning to go public by merging with a Singapore-based blank-check company in a deal that would value the company at roughly $2.1 billion.
West Hollywood-based Grindr said Monday that it has agreed to merge with Tiga Acquisition Corp., a special purpose acquisition company (SPAC) trading on the New York Stock Exchange. Grindr plans to raise at least $384 million from the transaction, with plans to use the funds to pay down debt and further grow its business.
Since launching in 2009, Grindr has grown to around 11 million monthly active users globally, roughly 80% of whom are under 35 years old. The app, which is free to download on iOS and Android devices, has emerged as the queer community’s most popular answer to the Match Group-owned Tinder, which caters primarily to straight singles. Grindr does compete with other queer dating apps including HER, mainly used by lesbian women; Lex, for queer users; and Feeld, an app for polyamorous connections.
Grindr said it generated $147 million in revenue last year, a 30% increase from the year prior. That revenue growth was fueled by an increase in the number of users paying for the app’s premium subscription, which totaled 723,000 at the end of 2021—up 31.5% year-on-year.
Grindr is pursuing a SPAC merger despite a sharp slowdown in SPAC deals amid heightened regulatory scrutiny, as well as a wider stock market correction that has pumped the brakes on IPO deal volume this year. Still, SPAC deals remain a quicker way for companies to list on public markets by side-stepping much of the regulatory red tape around traditional IPOs.
The app recently came under fire after a Wall Street Journal article exposed Grindr’s years-long practice of selling users’ precise location data to the highest bidder—a practice that runs the risk of outing some users’ sexuality and compromising their safety. The company countered the report by claiming it had implemented new privacy policies to prevent the sharing of “precise location” data.
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Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
https://twitter.com/samsonamore
samsonamore@dot.la
'In a World Where We're All Scared It's Easy to Forget There are Opportunities': L.A.'s Glitziest Venture Capital Team is Still Hunting for Deals
06:39 AM | April 13, 2020
M13, named after one of the brightest star clusters in the Northern Sky, has considerable star wattage of its own and is decidedly the most L.A. of all the L.A venture capital firms.
Co-founders Carter and Courtney Reum together boast around 170,000 Instagram followers and in more normal times frequently post pictures with celebrities at parties or from their travels around the world. Carter has been linked to dating Paris Hilton, who was interviewed by Courtney onstage at the Upfront Summit in January. Sir Richard Branson is a limited partner in the firm as is Arianna Huffington.
But, now that glitz appears on hold as the brothers grapple with a pandemic that hit right as the Santa Monica early-stage consumer technology firm was in the midst of deploying the $175 million in its second fund. COVID-19 has hurt consumer companies especially hard, including once high-flying brands in M13's portfolio like Bird, FabFitFun, and ClassPass (M13 is also an investor in dot.LA.)
But Carter, 39, says he is intent on finding opportunities in how consumer behavior is changing and intends to raise a third fund next year. "Capital will be harder to get," he said. "We're hopeful that a premium will be put on what we bring to the table."
The brothers founded M13 in 2016 after they sold their spirits business, Veev, for a hefty multiple to a St. Louis beverage conglomerate. They built a reputation of putting in very long hours and expect the same from their employees. And they also share the same enviable resume: Columbia undergrad followed by Harvard Business School topped by a brief investment banking career at Goldman Sachs.
They are also relentlessly polished and on-message. When asked during a February office visit to describe the last time they disagreed about something, they looked at each other and there was a long pause. They were never able to come up with an answer.
Before coronavirus, M13's warehouse-chic Santa Monica headquarters was a bustling hive of activity, filled with people scurrying from meeting to meeting. The firm also has an office in New York a few blocks away from Gramercy Park and a partner, Gautum Gupta, based in San Francisco.
But on March 12th, all the offices closed and workers went home, connected only by Zoom, Slack, and telephones. Before focusing on business, Carter said it was essential to make sure employees had what they needed to adapt to the new reality.
"We said we didn't want to talk about anything related to work until we had the people thing settled," Carter said.
He said it was important to realize the uniqueness of the situation. Many employees are preoccupied with worrying about loved ones and are filled with anxiety. Some know multiple people who have died.
"This is different from running a remote culture when things are great," he said.
M13 set up a #CoronaCare slack channel focused on how to take care of people during the crisis. Carter says it's more important than ever for leaders to be very clear about what they expect and to formalize processes because it is impossible to walk over and chat with someone at their desk.
"You have to get in the habit when you finish a call with someone where you agree on next steps," he said.
M13 prides itself on its culture and the Reums still want to maintain it as much as possible when everyone is working remotely. They also wants people to still look forward to "going" to work everyday, even when they are stuck at home in their yoga pants.
The firm has been doing two virtual standup meetings per day, with employees dancing or celebrating St. Patrick's Day. There's also a 30-day ab workout challenge and Carter makes it a point to spontaneously make a video call with at least two employees a day to check in on how they are doing.
Beyond the Zooms and Slacks, there is still a fund to deploy and Carter says M13 is actively hunting for deals. It helps that valuations, which had ballooned in recent years, are now coming back to earth.
"In a world where we're all scared it's easy to forget there are opportunities," Carter said. "We are absolutely still writing checks."
Carter and his team are focused on how consumer behavior is changing and what businesses will benefit, and what people will need versus what they merely want. He cites two M13 portfolio companies seeing a rush of interest that he does not think will be short lived.
"Daily Harvest is booming right because people are not able to get food from local grocery stores," Carter said. "Capsule had one of its highest sales weeks because people don't want to go to pharmacies."
Carter does acknowledge that many of his companies will not be as well positioned for the present reality or even the post-COVID world.
"All of us will have companies in our portfolio that will be forced to close," he said.
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Ben Bergman
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
https://twitter.com/thebenbergman
ben@dot.la
Veo CEO Candice Xie Is Bringing an Anti-Tech Bro Approach to Micromobility
06:00 AM | February 07, 2022
Image courtesy of Veo
Yet another micromobility startup will soon call Los Angeles home, bringing its two-wheel sensibilities to what’s long been a four-wheel city.
Veo, an e-scooter and e-bike-sharing startup, will open its new headquarters on Santa Monica’s Third Street Promenade later this month. Originally hailing from Chicago, Veo plans to hire up to 200 employees locally, as it outlined in application documents filed with local authorities. The company currently operates in more than 25 cities, including Santa Monica, and plans to launch across wider Los Angeles by the end of this month.
“With this kind of active user base year round, it’s like heaven for us,” according to Veo CEO Candice Xie. Both Xie and her co-founder, Veo president Edwin Tan, have moved to the L.A. area as part of the relocation.
Founded in 2017 as a bike-sharing startup, Veo has since expanded to include e-scooters in its offerings. It is also the only major micromobility operator run by a female CEO. Xie and Tan were inspired to launch Veo after witnessing the bike-share boom in Asia, but their ambitions were decidedly greener: Rather than sourcing cheap bikes that would eventually end up in a landfill, they wanted to build their own quality product and provide a scalable, sustainable service for communities.
Veo CEO Candice Xie.
Image courtesy of Veo
Tan, formerly an engineer for bicycle manufacturer Trek, brought his experience in manufacturing and supply chain logistics, while Xie—a former financial planner for Schneider Electric—brought her business background. They initially named the company VeoRide, as in “we all ride.”
As Veo grew its offerings from bikes and e-bikes to e-scooters in 2019, it continued its commitment to accessibility for all riders across socio-economic demographics. That’s a notable goal given how, according to a 2020 report by the L.A. Department of Transportation on the county’s micromobility pilot program, 64% of riders identified as male, 58% were aged 18-to-34 and nearly a quarter earned over $100,000.
After Veo built its first standup scooter in 2019, Xie saw an opportunity to develop a product that could appeal to a more diverse user base. “As a woman—and I cannot speak for all women—I am a more risk-averse person,” she said. “So standing there [going] 15 miles per hour, with cars riding side-by-side with me, made me a little bit freaked out.”
In 2020, Veo debuted the Cosmo, a sit-down e-scooter with a larger wheelbase and lower center of gravity. Xie said that they wanted to appeal to women who might wear high heels or skirts to work, as well as older users who would feel more comfortable sitting down. A Veo user survey last year found that women, people with disabilities and riders taking longer trips all preferred it to Veo’s standup scooter.
Xie believes that the future of micromobility is in a multi-model approach.
“I don't believe it if someone says, ‘This is the perfect scooter,’” she said. “No, it's not; we're just a couple of years into this industry. There are still a lot of things we can build from the safety, sustainability and inclusivity side.”
Veo plans to roll out more vehicle types and features, appealing to a wide range of users and use cases, in the coming months.
So far, it seems like Veo’s city-by-city strategy is paying off. It’s the only company operating in both Santa Monica and New York City—where, alongside Bird and Lime, it’s part of the Big Apple’s recently launched micromobility pilot program. (Bird was notably kicked out of Santa Monica last year, while Lime pulled out of the city in 2020.) Veo also raised $16 million in new funding last year to support its expansion into new markets.
Xie noted that cities are maturing in their approach toward micromobility after the industry’s tumultuous beginnings, with municipalities choosing companies that are willing to operate as community partners rather than chasing riders at all costs.
In December 2020, Xie took to Medium to call out other operators for prioritizing rapid growth at the expense of building a sustainable business model. She pointed out that Veo—and not Lime, as that company’s CEO Wayne Ting had intimated—was the first micromobility company to achieve profitability.
While Xie does not hesitate to throw down the gauntlet, being a female CEO is not without its challenges. She mentioned one investor forum where, as the only woman in the room, another attendee handed her his drink thinking that she was a server.
“A lot of products used by females are actually designed by males,” she said. “And I do think that’s something that needs to be improved.”
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Maylin Tu
Maylin Tu is a freelance writer who lives in L.A. She writes about scooters, bikes and micro-mobility. Find her hovering by the cheese at your next local tech mixer.
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