Tinder Founders Settle Case Against Match for $441 Million

Harri Weber

Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.

Tinder Founders Settle Case Against Match for $441 Million

Dating giant Match will pay $441 million to several Tinder co-founders and early employees, who claimed that the company cheated them out of billions of dollars worth of stock options, according to regulatory filings.

Tinder's former CEO and dot.LA investor Sean Rad, former CMO Justin Mateen, and others brought the case against Match, charging that it misled two investment banks to suppress a private valuation of Tinder in 2017. The valuation was used at the time to establish the price of their stock options.

At each side of the court battle stood wealthy executives and investors who had already cashed in on the rise of mobile dating, pitting Rad and the others against billionaire media mogul and IAC chairperson Barry Diller and former Match CEO Greg Blatt.

“Under the terms of the settlement agreement, Match Group will pay plaintiffs $441 million, and plaintiffs will dismiss all claims presently on trial and in arbitration related to the 2017 Tinder valuation,” Match said in a filing. It’s a significant sum for Match, which had $523 million in cash and short-term investments on hand as of Sept. 30.

Tinder launched in 2012 out of Hatch Labs, IAC's now defunct incubator. The holding company — which buys and flips media and tech firms like Vimeo and Expedia — was also wrapped up in the case, but Match took on IAC’s liability when the two split into separate, publicly traded companies last year.

That means Match and its shareholders were stuck with footing the bill for the settlement.

The case kicked off at the start of November. Over the course of a month, Match’s stock price declined roughly 17% to $128.32 per share, while IAC’s stock price slipped more than 15% to 129.30 per share.

"The parties are pleased to announce that they have settled the valuation lawsuit presently on trial in New York Supreme Court and the related valuation arbitration,” the groups said in a joint statement. Spokespeople for the former Tinder executives declined to comment on the deal, and Match did not respond to a request for comment.

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From The Vault: VC Legend Bill Gurley On Startups, Venture Capital and Scaling

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Bill Gurley in a blue suit
Bill Gurley

This interview was originally published on December of 2020, and was recorded at the inaugural dot.LA Summit held October 27th & 28th.

One of my longtime favorite episodes of Office Hours was a few years ago when famed venture capitalist Bill Gurley and I talked about marketplace-based companies, how work-from-home will continue to accelerate business opportunities and his thoughts on big tech and antitrust.

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LA Tech ‘Moves’: Deep 6 AI and Point Predictive Gain New CROs

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

LA Tech ‘Moves’: Deep 6 AI and Point Predictive Gain New CROs
LA Tech ‘Moves’:

“Moves,” our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.


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