It's A (Court) Date? Tinder Employees Sue Parent Companies

IAC and Match Group are facing a lawsuit from 10 current and former Tinder executives.

The suit -- filed in the New York State Supreme Court on Tuesday -- claims that Tinder’s parent companies cheated the group out of stock options, which would now be worth at least $2 billion.

The plaintiffs include Tinder’s co-founders, including Sean Rad, Justin Mateen and Jonathan Badeen. Badeen is the only one among them who remains at the dating-app maker.

“We never imagined the lengths [IAC] would go to cheat all the people who built Tinder,” Rad said in a statement.

“The Tinder team -- especially the plaintiffs who are currently senior leaders at the company -- have shown tremendous strength in exposing IAC/Match’s systematic violation of employees’ rights,” said Tinder’s one-time CEO.

IAC/InterActiveCorp and its subsidiary, Match Group are calling the lawsuit baseless.

“Since Tinder’s inception, Match Group has paid out in excess of a billion dollars in equity compensation to Tinder’s founders and employees,” according to a statement released on Tuesday.

“Match Group and the plaintiffs went through a rigorous, contractually-defined valuation process involving two independent global investment banks, and [Sean] Rad and his merry band of plaintiffs did not like the outcome," the statement continues.

“Mr. Rad (who was dismissed from the Company a year ago) and Mr. Mateen (who has not been with the Company in years) may not like the fact that Tinder has experienced enormous success following their respective departures, but sour grapes alone do not a lawsuit make.”

Rad’s reign as CEO of Tinder was controversial one. Among other issues, Rad was widely believed to have mishandled a sexual harassment lawsuit brought by Tinder co-founder and former executive Whitney Wolfe.

The suit comes less than a week after Match Group reported better-than-expected second-quarter earnings, which was largely thanks to Tinder.

From the second quarter of 2017 to 2018, Tinder’s average subscriber rate nearly doubled from 1.7 million to 3.8 million.

Partly as a result, Match expects Tinder’s revenue to double from approximately $400 million, last year, to roughly $800 million, this year.

Year-over-year, Match said total revenue grew 36% to $421 million, which it largely attributed to 27% average subscriber growth, along with increase of average revenue per user of 8%.
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