Tinder is getting closer to going public and it could be worth up to $3 billion
Back in June, IAC announced that it would pursue an IPO for less than 20% of common stock of The Match Group.
This business segment includes Tinder - a dating app that asks users to swipe right to find a math - match.com, OKCupid, as well as non-dating brands like The Princeton Review.
Analysts at Bank of America Merrill Lynch valued Tinder at $1.35 billion following the IPO announcement in June. But using the average of peer subscription services, BAML says a bullish scenario could result in Tinder revenue of $250 million and a $3 billion valuation.
On Tuesday, IAC reported a better-than-expected profit of $59.3 million for quarter, compared to an $18 million loss a year earlier.
Due to legal restrictions associated with the impending IPO, executives were only able to give a very limited outlook for The Match Group. But the little information they did release showed great news for Tinder.
In a note to clients on Wednesday, analysts at Oppenheimer estimated that Tinder's US paid user base grew 80% from Q1, while it's international paid users grew 70%. Oppenheimer, and analysts at other banks, all seemed to agree that Tinder now has about 500,000 paid subscribers. On this basis Oppenheimer valued Tinder at $1.31 billion.
"We've also been focusing on the core user experience, and those efforts are starting to payoff, as we've seen our app store rating climb to an industry leading 4.5 stars, and a number of our user experience metrics are showing improvement."
The company also reported that Tinder was a "major contributor" of paid user growth this quarter after launching its paid version, Tinder Plus, earlier this year. As of October 2014, IAC said that Tinder had more than 50 million active monthly users who were collectively swiping over 1 billion times a day.