Lawsuits against online dating companies
The suit provides a fascinating look behind the scenes not only at the operations of Tinder, but also of the kinds of battles that can happen between technology innovators who create new companies and the investors who help to finance their early operations.
Tinder has helped change the way that people meet by gamifying dating.
Users can swipe left on a potential date's profile if they aren't interested, and swipe right if they are. When it was introduced, the app transformed the online dating experience and paved the way for a number of competitors that iterated on the format.
Today, the company says it sees 1.6 billion swipes a day and touts a total of over 20 billion matches.
IAC overall, which is controlled by media magnate Barry Diller and which also includes brands such as Angie's List and The Daily Beast in addition to the services that make up Match, has a market cap of about billion.
The price of both stocks slumped immediately after the suit was filed. Last week, shares of Match shot up 17% in a single day and shares of IAC jumped nearly 8% after Match reported huge gains from Tinder.
The suit claims that Rad and others created Tinder largely on their own time, and with their own money, while working on other projects at Hatch Labs, a business incubator IAC runs in New York.
The suit says they were told that if Tinder was successful they would receive a "founder friendly ownership" deal and would be given a majority the company.
That manipulation allegedly deprived some early Tinder employees of millions, or billions, of dollars. They manipulated financial data, and essentially stole billions of dollars by not paying us what they contractually owe us," Rad said in an interview with CNN.
Bumble, in its 0 million countersuit, alleged that Match brought a frivolous lawsuit after lowballing the Austin, Texas-based Bumble with an investment offer and using the pretense of investing to gain access to Bumble’s records and business strategies.