The spark has gone out. The Tinder founders who sued Barry Diller's IAC/InterActiveGroup and Match Group in a $2 billion breach of contract dispute will walk away with $441 million, according to documents filed Tuesday with the Securities and Exchange Commission.
"The parties are pleased to announce that they have settled the valuation lawsuit presently on trial in New York Supreme Court and the related valuation arbitration," according to a joint statement.
The claim, brought by the hookup app’s originator, Sean Rad, and his startup team, claimed that Diller’s handpicked fixer Greg Blatt rigged a $3 billion lowball 2017 valuation of Tinder to water down the entrepreneurs out of lucrative stock options. The founders say that with more than $800 million in yearly revenue, the company was worth $12 billion.
Match and IAC lawyers painted Rad and his crew as millennial fumblers who were blowing the dating service's chances of growing into a worldwide powerhouse.
When Blatt was brought in to run the company, Rad became enraged and, according to Diller’s team, threatened to derail the company.
Blatt had his own anger issues and quickly exited the company with a sexual harassment claim hanging over him. He denied the claim, saying that the interaction was consensual.
Rad cashed out of the company in 2018, selling his options for about $300 million. He will split the money with six other plaintiffs, minus lawyer fees and a payout to investors who helped fund the litigation.
Thomas Claps, a litigation analyst for Susquehanna Financial Group, who has followed the trial said he saw it coming.
“Match while paying out a very significant sum for a case where they claimed they did not engage in any wrongdoing during the valuation, dodged a major bullet since the jury could have come back with a much higher damages award,” he said. “It’s not surprising because it had a tremendous amount of trial risk for both sides, but more for Match because that had the financial liability."
Jurors in the case clapped and shouted when Judge Joel Cohen announced that the courtroom dispute was over Wednesday morning.
Alexis Engle, 24, a research coordinator who sat on the panel for the three-week trial, said that she had yet to make up her mind.
She’s not on Tinder. “I never use it,” she said.