Tinder Worth $10 Billion Less Than Rad Claims, IAC Lawyer Says

(Bloomberg) -- The popular dating app Tinder wasn’t worth anywhere near the $13 billion its founders claim in a stock-options lawsuit, and an analysis by two banks in 2017 put the value at closer to $3 billion, a lawyer for IAC/InteractiveCorp. and Match Group Inc. told a New York jury.

Former Tinder LLC employees, including co-founders Sean Rad and Justin Mateen, “want you to second guess these expert banks and they want you to second guess these experts banks to the tune of 10-plus-billion dollars,” lawyer Bill Carmody said Tuesday in his opening statement at the state court trial.

Match and its controlling investor, Barry Diller’s IAC, which helped fund Tinder’s development as a private company, are accused in the lawsuit of commandeering the process to create a lowball valuation of Tinder and avoid paying the former executives and early employees more than $2 billion in options they claim they were owed.

The two banks, Barclays Plc and Deutsche Bank AG, are “no lightweights” and didn’t just look at the information that was submitted by the parties to make their decisions, Carmody told the jury. All of the concerns that the founders and the other plaintiffs have raised were communicated to the banks, which “sifted through the noise” and came back with their independent evaluations, he said.

“The banks were in the driver’s seat,” Carmody said. “They are the ones who determine what they want to see and what they don’t want to see. They know what they want and what they don’t want.”

Lawyers for Rad and the other founders argued during the first day of the trial on Monday that they were duped by IAC and Match into thinking the company was far less valuable than it really was. Rad is expected to take the stand when the trial resumes on Wednesday morning.

The case is Rad v. IAC/InterActiveCorp, 654038/2018, Supreme Court of the State of New York (Manhattan).

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