Key points
- Grindr raises guidance and now expects to hit its 2027 targets about 12 months early, with 20% of its float sold short.
- Grindr Edge, its $120-a-month AI tier, drew 400,000 early-access signups in 72 hours with retention well above existing paid tiers.
- Grindr is scaling Freddie, a profitable telehealth PrEP business generating $4,800 per patient per year, into a second revenue line.
Grindr plans a $500-a-month tier to grow beyond dating
Grindr is converting a mature dating app into a platform with a second revenue line and far higher prices. It bought Freddie, a profitable PrEP telehealth provider whose patients generate $4,800 a year, and management argues it can scale that the way it scaled the app. On the dating side, an AI tier called Edge showed retention well above existing paid products and pricing power far above the $120 a month it will charge.
Takeaways
- Grindr is building a second business in telehealth. Last quarter it closed the acquisition of Freddie, a profitable Canadian telehealth provider of PrEP, the HIV prevention drug. Arison says each patient staying a year generates $4,800 at strong margins, and that Grindr can scale it because it has scaled a business before.
- Edge drew 400,000 early-access signups in 72 hours. The AI tier recommends people a subscriber should meet instead of simply showing more profiles. Retention among test subscribers ran well above Grindr's existing paid tiers, and Arison says demand is high, though he does not expect every registrant to convert.
- Edge launches at $120, well below tested prices. Grindr tested close to $375 a month in the United States and $500 in Canada, where users read the price as American. Arison says the tier carries a lot of pricing power and that Grindr deliberately priced below what it could have charged.
- Higher tiers are coming at $500 to $600. Arison expects the next tier above Edge to cost three or four times as much, and he agreed when the host asked whether that could mean $500 or $600 a month. A future VIP product would pair in-app features with real-world events.
- Users 35 and older are the re-engagement target. About 46% of U.S. users and more than half worldwide are 18 to 29, which Arison says refutes the idea that Gen Z avoids such products. He expects most Edge subscribers to come from the older group, which used Grindr more in the past.
- Guidance rose and 2027 targets moved forward. Grindr raised its guidance for the year and now expects to reach its 2027 targets about 12 months early. The stock is up about 1.8% year to date, the market capitalisation is $2.4bn and 20% of the float is short.
The moderation dispute
- The host relayed complaints from friends in the community, older than 35 and living in New York City, who reported encountering bots, hustlers and OnlyFans creators on the app.
- Those same users said the platform felt better in the past, which the host put to Arison directly.
- Arison said bots are a challenge across social networks and that Grindr has spent a lot of time, money and effort over 18 months building technology to identify and remove bad actors.