Grindr seeks growth reset by moving beyond its hookup app roots

CEO George Arison hopes new travel and networking features can expand its appeal

By Anna Mutoh, Harriet Clarfet, and James Fontanella-Kahn, published: Financial Times, Mar 5, 2024

Grindr has been outperforming dating app peers Match Group and Bumble following its restructuring © Getty Images

Grindr, the company behind the gay dating app of the same name, has had a tumultuous ride since going public through a merger with a special purpose acquisition company in November 2022.

Its shares, which leapt more than 300 per cent that day, have since dropped three-quarters, while nearly half of its employees left after it introduced a forced relocation policy, and heavy severance and loan costs deepened its losses.

Even so, George Arison, Grindr’s chief executive for the past 16 months, claims to be more upbeat about its prospects than when he was approached to run it.

The Georgian-American tech entrepreneur is betting Grindr can broaden its appeal and boost its revenues with new features focused on long-term dating, travel and professional networking. A founder of the taxi app now known as Curb and used car marketplace Shift, Arison points to Uber as a model, citing its expansion into services such as food delivery. 

There are early signs that Arison is persuading investors. Grindr’s stock has rallied almost two-fifths since its third-quarter earnings announcement in November, boosted by news that month that the company had completed a $350mn debt restructuring, alleviating its high borrowing costs.

Grindr has been outperforming dating app rivals Match Group and Bumble following its restructuring. Bumble last week has also announced a restructuring plan that will cut about 30 per cent of its workforce.

But some users remain doubtful about Grindr’s ability to transcend its reputation as a platform for casual “hookups”, sharpening the focus on Arison’s growth strategy as the company prepares to release full-year results on March 7.

In an interview with the Financial Times, Arison said Grindr could begin generating more revenue by charging extra for functions in the app, some of which its subscribers are already using for free. 

Other dating app groups are making their own attempts to squeeze more money out of users looking for love. Last autumn, Match’s Tinder launched an invitation-only premium membership worth $499 a month.

Among the features Grindr intends to add to its platform is an “à la carte” payment option for travel services, Arison said, highlighting its users’ strong interest in travelling to events such as Aspen Gay Ski Week and New Year's Eve in Rio de Janeiro.

One such service Grindr is testing is Teleport, a feature that lets users place their profile in a new location for an hour to connect with others ahead of a trip.

Arison also points to a survey Grindr conducted last year that found that while 88 per cent used the app for casual interactions, roughly half said they also used it for dating and long-term relationships. 

The latter number had “increased dramatically over the years”, said Arison, partly attributing it to cultural changes since the US Supreme Court legalised same-sex marriage in 2015. “There is a huge opportunity to build both free and paid features that support these use cases,” he said. 

Arison is reluctant, however, to define his vision as the creation of a “gay super app” — a term used at Grindr before his arrival. “There is so much that we’d have to do in the next two years, that focusing on [a super app] probably would be a distraction,” he said.

Grindr’s third-quarter results, released in November, revealed that its average paying users — including for à la carte products — grew almost one-fifth year on year to 962,000, helping to drive quarterly revenues up almost two-fifths to $70.3mn. 

But the company racked up losses of $11mn over the first nine months of the year, due in part to $8mn of severance costs. Those followed an unusually strict return-to-office mandate in which Arison gave some employees a few weeks’ notice to choose between relocating to their team’s newly assigned “hub” city or a six-month severance package. 

Arison’s mandate came a fortnight after employees launched a union drive, said Quinn McGee, former Grindr product manager and union organiser who said its majority LGBTQ+ workforce wanted to ensure they kept their trans-inclusive benefits after it went public. 

Arison said he called people back to the office to improve “operational excellence”, which he thought was lacking at Grindr when he arrived.

Market participants will scan the company’s upcoming earnings for signals about how lasting the financial impact of such disruptions has been. Arison’s plans also face scrutiny from users, some of whom told the FT that they doubted Grindr’s ability to escape its image as a hookup app.

Mike, a 30-year-old from Chicago who asked that his last name not be used, said he would be interested in paying for a super app that also provided less explicitly sexual features, but Grindr’s brand was too closely associated with sex. 

“As you get older . . . you kind of want something more meaningful,” said Ayodeji Rotinwa, a 33-year-old Nigerian native who has been an on-and-off Grindr user for seven years. Even so, he said, “the belief is that you cannot find that on Grindr”. 

Others said they would be reluctant to pay Grindr more for information they can already access for free by chatting with other users.

“If you want to find out where to eat or where to go, the gays always know,” said Michael Henry, a 52-year-old Grindr user in New York City. Henry has a $39.99-per-month premium subscription and has used the app for travel information, but said he would not pay à la carte for travel tips. 

“It’s too complicated,” he said. “This is a hookup app.”