IAC Chairman Barry Diller talked about dating app Tinder while onstage today at Business Insider’s Ignition conference, but surprisingly, he didn’t directly address the company’s biggest piece of recent news — the fact that co-founder Sean Rad will step down from his role as CEO.
Here’s how Diller tells the Tinder story: IAC created “this little incubation group” (called Hatch Labs) a few years ago, and one of the products to emerge from the incubator was Tinder.
“And we were lucky enough — smart enough, I wouldn’t say so much — that we left it alone to the founders,” Diller said. As a result, those founders were able “to create this incredible virality. Since then it’s just skyrocketed.”
That seems like an obvious setup to ask: If leaving leaving Tinder alone was key to its early success, why is Rad being demoted? (As reported by Forbes last month, he’ll remain involved as president and board member.)
I’m not trying to say that IAC is or is not making the wrong decision here, but it just seemed strange that it wasn’t addressed. According to interviewer Henry Blodget, he ran out of time before he could ask the question.
(Rad’s co-founder Justin Mateen had already been suspended from the company following a sexual harassment lawsuit from former vice president of marketing Whitney Wolfe. The lawsuit was settled a few months ago.)
What Blodget asked about instead was Tinder’s valuation and financial structure. IAC’s relationship with Tinder was the subject of considerable discussion earlier this year — partly because, from the outside, Tinder looked like a regular startup. And there were stories, including one from TechCrunch, that it was raising outside funding. Ultimately, Benchmark took a stake, and partner Matt Cohler joined the board, but reportedly, no money was invested.
“It’s not a VC model because we’re not a VC,” Diller said, adding, “We’re not every three months creating a new faux value for it, because we don’t really need any money. We’re perfectly happy to finance it all.”