There was an audible gasp in the Twittersphere this morning, after Bloomberg reported that buzzy mobile dating app Tinder was valued at $5 billion in a recent transaction.
According to Bloomberg, IAC recently purchased 10 percent of the company for $500 million from Social+Capital Partnership founder and former Facebook exec Chamath Palihapitiya. Palihapitiya had accumulated Tinder shares via his investment in Xtreme Labs (acquired by Pivotal), because the mobile development group had done work for Tinder in exchange for equity.
We’ve heard from a well-placed source that the ten percent number that Bloomberg reported is inaccurate.
Yagan, when reached for comment by TechCrunch, confirmed the inaccurate $5 billion valuation and said “IAC has been, is, and always will be the majority owner of Tinder.” Sean Rad, CEO of Tinder, added that the numbers that have been reported in all of the press reports around the transaction are incorrect.
Business Insider reported that the valuation is more like $500 million, which would mean Palihapitiya collected around $50 million. But another source close to the transaction tells us that while the $500 million valuation is closer to the truth it is also still not completely accurate, and that Tinder had a different valuation in the exchange.
Shares of IAC shot up today amidst the report that Tinder could have joined the billion dollar club, but then dropped after the report was debunked.