Grindr went public 7 months ago. Here’s what’s happened since then

Just over six months later Grindrthe leadership of the LGBTQ+ male-focused hookup and dating platform is settling into life as a public company and charting a roadmap for the future.

The stock initially surged after going public through a merger with blank check company Tiga in November, an events industry insider said. a milestone for LGBTQ+ inclusion in finance. The shares, which now trade under the symbol GRND, are a long way from their first close at $36.50. For most of 2023, the stock has traded around $6 per share.

Since its debut on November 18, Grindr has begun wooing investors and making the necessary adjustments to become a public company, while making innovative plans for the future of the product. This journey has taken place in a changing market, with stocks rebounding from the large sell-off of 2022.

It also takes place at a unique intersection between LGBTQ+ inclusion and the business world. Public companies such as disney, Target and a relative of Bud Light Anheuser-Busch Inbev have been criticized by a largely conservative base dissatisfied with actions aimed at community inclusion. It also has affected performance of these actions.

In the seven months since Grindr representatives rang the opening bell, CEO George Arison has focused on matters relevant to a public company, such as hiring specialists versus GPs and cash collection.

He and business leaders attended banking conferences, raising the company’s profile among all of Wall Street. Last month, Grindr management was at an event hosted by JPMorgan In Boston. Arison was surprised by the level of investor interest in attending these conferences, noting one in March that had back-to-back meetings from 8:30 a.m. to 5:30 p.m.

Admittedly, not all investors who meet management end up buying it. Arison noted that some banks were unfriendly at conventions; he declined to share names. However, he thinks more are now accepting an action like Grindr — which unabashedly focuses on the LGBTQ+ community and embraces sexual culture — than if the company had gone public even a few years earlier.

“I don’t think 10 years ago that would have been the case,” he said. “I think if you ask people, they’ll be like, ‘Oh, nothing would have been different.’ But I think it would have been very different.”

Grindr’s actions followed the typical tech story, but at a grander extreme. Shares are up about 20% in 2023. The stock is down 54% in 2022 taking into account SPAC’s stock price of about $10 before the merger. By comparing, Bumblebee And Matching group ended 2022 down. In 2023, Match’s shares are roughly flat, while Bumble is down about 18%.

Grindr does not yet have coverage of Wall Street companies, with its latest earnings call consisting of questions from retail investors asking for information on topics such as whether any board members are using the app or whether competitors on the web are a concern. The action caught the attention of the Wall Street Bets Reddit page, which rose to fame in the investing world by becoming a primary discussion forum for the meme-stock action. A new competitor has also joined the field: Match Group has launched its dating app Archer on June 1focused on gay, bisexual and queer men.

Some see an improving environment for dating apps as a whole, though Grindr management is quick to note that the platform offers more than that. Online dating penetration continues to grow despite concerns about market oversaturation, according to a Morgan Stanley report released earlier this month. The company noted that demand is growing, with 65% of online users planning to increase their usage over the next year.

Arison said he was confident the stock would do well as long as the company stayed on the path of innovation.

“The reality is what I can control, and what my team can control, is executing a plan and exceeding people’s expectations,” he said. “If we deliver this quarter after quarter after quarter, the stock is going to take care of itself.”

Just over 6% of the shares are available for public investors to buy and sell, according to FactSet. This means that most stocks are held by institutions and large individual investors.

The largest institutional investor is 12 West Capital Management, which owns about 2.7% of the total shares, a position worth $28 million. Prescott Investors, the second largest institutional holder, recently reduced its position to almost half of what it was and now has a stake of around $14 million, or 1.3% of the total.

Big names such as Vanguard, BlackRock and Charles Schwab also have small holdings, each accounting for less than 0.2% of total shares. These institutional holders all did not respond to CNBC’s requests for comment or declined an interview, with many noting that they do not discuss individual holdings as part of company policy.

G. Raymond Zage, a Grindr board member who also runs Tiga, is the biggest investor, with more than 45% of all shares. Board Chairman James Fu Bin Lu held the second-largest position, accounting for about 22% of the total available.

Grindr is also busy planning the app’s future. Arison called the product a “total open book” and said it had the potential to be a “super app” for the community it serves.

Arison was pleased with the expanded free functionality to make it a social network and community space. Grindr has approximately 13 million monthly active users, with representation around the world, company data is displayed. The average user spends 58 minutes per day on the platform, end of 2022.

“When people see the engagement levels on Grindr, which are out of this world, they’re like, ‘Wow, there’s no way you can be used solely as a dating product,’ because nobody… doesn’t even come close to that level of commitment,” he said.

But it also sees an opportunity to monetize more, with fewer paying customers than its peers. There were approximately 866,000 paying customers in the first quarter, which represents less than 7% of the total number of monthly users.

Arison said Grindr has an opportunity to expand into international markets: As other countries become more LGBTQ+ friendly, it may encourage community members to feel safer on the app.

An ad-free offering is one idea to attract more paying users, though the company also sees the potential to get more targeted advertising for businesses that specifically want to reach LGBTQ+ people.

Another idea is to add a feature that will allow users to “move” their profile to other locations and be found in different areas, which may appeal to regular travelers. Grindr also recently launched a web offering, which may offer more features at an additional cost in the future.

The company is also interested in developing part of the platform to focus more on dating, with the possibility of artificial intelligence playing a role in the future.

But Arison noted that doesn’t mean the company will turn away from other uses of the app, such as logins or community-related information. He highlighted Grindr’s role in dissemination of information and resources around mpox last year as an example of how users access the platform for purposes other than simply meeting other members of the community. This summerthe app partners with the Pan American Health Organization to educate LGBTQ+ communities about mpox.

“We don’t hide that sex is at the heart of the product. If you’re an investor in Grindr, you have to realize that sex is a very big part of gay culture, and sex is a very big part of Grindr,” Arison said “But there’s a lot more going on in the app. I don’t think anything has changed, it’s just the reality for us.”

“We want to be the gay super app,” he said.