Tinder founders sue parent companies Match and IAC for at least $2B

&gt; <i>The suit alleges that IAC and Match Group manipulated financial data in order to create &#x27;a fake lowball valuation&#x27; (to quote the plaintiffs’ press release), then stripped Rad, Mateen, Badeen and others of their stock options</i><p>Wait, they didn&#x27;t exercise their options into the sale? Did the founders hire a team of squirrels as their bankers? This is M&amp;A 101 when switching to majority control.<p>EDIT: Ah, Tinder was launched as an internal project at Match. Taking options in a majority-owned entity is...odd. There is no proper way to value a majority-owned entity without discounting for the majority ownership. Issuing options for the parent would have been a better offer and better ask.

In 2014, former Tinder VP Whitney Wolfe, who previously had a &quot;cofounder&quot; title (and would later go on to found Bumble), sued IAC and Match over sexual harassment from another Tinder &quot;cofounder&quot; Justin Mateen, who is one of the plaintiffs in <i>this</i> lawsuit. (I put &quot;cofounder&quot; in quotation marks because it was an internal project at IAC and the history is a complicated.) Mateen was suspended and the lawsuit was settled for $1M.<p><a href="https:&#x2F;&#x2F;www.washingtonpost.com&#x2F;news&#x2F;the-switch&#x2F;wp&#x2F;2014&#x2F;07&#x2F;01&#x2F;read-the-most-surprising-allegations-from-the-tinder-sexual-harassment-lawsuit&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.washingtonpost.com&#x2F;news&#x2F;the-switch&#x2F;wp&#x2F;2014&#x2F;07&#x2F;01...</a><p><a href="https:&#x2F;&#x2F;techcrunch.com&#x2F;2014&#x2F;07&#x2F;09&#x2F;whitney-wolfe-vs-tinder&#x2F;" rel="nofollow">https:&#x2F;&#x2F;techcrunch.com&#x2F;2014&#x2F;07&#x2F;09&#x2F;whitney-wolfe-vs-tinder&#x2F;</a><p><a href="http:&#x2F;&#x2F;valleywag.gawker.com&#x2F;every-fucked-up-text-from-the-tinder-sexual-harassment-1598642609" rel="nofollow">http:&#x2F;&#x2F;valleywag.gawker.com&#x2F;every-fucked-up-text-from-the-ti...</a><p>Earlier this year Match and Bumble both sued each other in the midst of an attempt from Match to acquire Bumble. I am a little lost but I think Match &#x2F; Tinder sued for $450M for patent infringement and Bumble countersued for $400M for using the lawsuit to make them look less attractive to potential (non-Match) acquirers?

That is a brutal response from Match and IAC. Their statement also mentions that two separate banks were part of the valuation. I&#x27;d be curious what their proof is. A couple fun phrases from the statement:<p>&gt; <i>his merry band of plaintiffs</i><p>&gt; <i>but sour grapes alone do not a lawsuit make</i>

Random semi-tangential question: It seems that when companies&#x2F;PR people&#x2F;lawyers respond to lawsuits, they always use some version of this EXACT phrase:<p>&quot;The allegations in the complaint are meritless, and ____ intends to vigorously defend against them.&quot;<p>Responses almost always use the word &quot;meritless&quot; (or &quot;baseless&quot;) and almost always describe their forthcoming response to be &quot;vigorous&quot;.<p>Is there a legal reason why these responses always use the same language? Or is this like an inside joke in legal circles?

For those who don&#x27;t know, Tinder was launched by Sean Rad and his team out of IAC&#x27;s incubator Hatch Labs and IAC owns most of Tinder since launch.<p>More detailed link here: <a href="https:&#x2F;&#x2F;www.hollywoodreporter.com&#x2F;news&#x2F;barry-dillers-iac-sued-by-tinder-founders-2-billion-1134767" rel="nofollow">https:&#x2F;&#x2F;www.hollywoodreporter.com&#x2F;news&#x2F;barry-dillers-iac-sue...</a>

Glad to see founders get the employee treatment ;-)

$3B valuation sounds quite reasonable for Tinder. Even with Tinder Gold &quot;resetting the metrics&quot; with per transaction monetization.<p>$IAC total revenues last quarter was approx $1B. At market valuation ~$16B. I could be very wrong, but valuing Tinder at $10B seems upper bound optimistic to me. Match probably enjoys 10x engagement.

I suspect that Tinder came from the Hot-or-Not Mashup Camp contest entry years ago .. Can anyone confirm that ?

&quot;Mr. Rad and his merry band of plaintiffs&quot;<p>I sometimes really love legalese.

Mom always said if you play with match.com, you&#x27;re going to get burned.

tl;dr<p>match.com: we would like to buy tinder.<p>tinder: for how much?<p>match.com: we will offer you our stock in exchange for yours at a fair valuation.<p>tinder: okay!<p>match: alrighty accountants, round down on everything and use the methodologies that provide tinder with the lowest valuation.<p>tinder: not fair!

If you had this obviously brilliant app idea why would you launch it as an internal project? Something about the founding story here has never added up.

using their domain terminology, just for fun -<p>Match, Tinder and Bumble are in a weird relationship. Match tried to make an inappropriate pass atTinder, but she is not interested, so considers it as a sexual harassment. Same goes for Bumble.<p>This is a relationship 101. If they can&#x27;t settle internally then they should leave this dating business :-)