Hello, everybody. My name is Alan Tekerlek. I'm with Citizens JMP, and I'm very excited today to introduce George Arison, CEO, and Vanna Krantz, CFO of Grindr, Inc. Grindr, Inc. is the largest GBTQ+ online dating app. Many of you are familiar with the name. Well, very, very excited to welcome the management team here today. I think most, and this is a question to George, I think most people are familiar with Grindr, but for those who may not be, can you provide a brief description of the Grindr app and platform, and put a maybe finer point on the community that it serves?
So Grindr has been around for nearly 15 years. It launched actually March 2009, one of the very first kind of big apps to happen on the iPhone. My own personal experience, like, I was building an app for a BlackBerry at a company I had started at the point, was not using an iPhone. And then a friend of mine showed me Grindr one night, and I'm like, "Wow, I gotta go get an iPhone." "I think I'll buy an iPhone next week." So, it's been and it kind of grew like wildfire in the gay community because it solved this immediacy topic around connection. It's unlike a lot of other dating apps, there is no matching that happens on Grindr.
You have a grid of people that you see based on how far they are from you. And it's an open architecture, you can speak to anybody that you want on that grid. And people can message you obviously as well, and you can speak to them as well without having to pay. We limit how many people you see if you're a free user, so you see 100 people if you're a free user, 500 if you're in our middle tier at $19.99, and unlimited number of people if you are paying $39.99. Initially, Grindr started out as a kind of casual dating product, meaning, like, I want to hook up with somebody, and I'm gonna use Grindr to do that.
But over time, as more and more people joined the product, it has a lot of use cases now that users use us for. So obviously, casual dating still is the kind of dominant use case. There was an FT article today where we actually gave some numbers, about 90% of people are there for that. But then, you know what? 55%-60% of people are on Grindr to also look for a long-term relationship, and we do know that about four out of 10 gay relationships that start in the United States start on Grindr in some way. Now, they might be relationships that start with a casual date and then turn into a long-term relationship, or friendships that turn into relationships as well, but that is a big aspect.
And then beyond those two kind of core use cases, there is a really big part of the community usage as well. Probably a lot of people have heard of a term, gayborhood, right? Every big city has a gayborhood where a lot of gay people choose to live. Grindr functions like a gayborhood on your phone, so that you have friends on Grindr, you have networking that happens on Grindr, you have travel information that you get at Grindr, primarily by chatting with other people in places where you might go to, to try to understand, Hey, where should I stay? What are events that are happening in that location? What are good restaurants, et cetera. And even at the level of health information, right?
Grindr plays a really massive role in public health, because we are probably the primary way in which if there's a public health situation happening with our users, for those users to understand what might be happening. When monkeypox became a really big issue in 2022, Grindr went into overdrive and messaged massively on, "Hey, go get a vaccine." We actually built a widget working with an NGO on where to find a vaccine around the country, and 2 million Grindr users looked up where to get a vaccine through messaging that we provided, which was, like, massive, right? You can literally track Grindr started doing that, two weeks later, vaccination rates jumped, and then the epidemic kind of went away within about six to eight weeks.
That's great. So you've answered it, George, to some extent, but when you, when you look at what attracts the users to Grindr, I mean, you talked about use cases in terms of casual meetings versus long-term. How would you compare that to some other similar platforms that are out there?
Yeah, so one thing that's been really unique about Grindr is that in these 15 years, every new generation that comes out, has joined the product. So whereas, and by the way, we are 18+ only, so you can't use Grindr unless you're 18, and that's a really big deal for us in a massive way. There's zero tolerance for anybody underage on the platform. We've seen that, like with Facebook, for example, Facebook kind of lost the younger generation to Instagram and then Instagram lost it to Snapchat, and Snapchat to TikTok.
That's never happened with Grindr. We've kind of gotten a young cohort of users every time. And a big reason is 'cause that's where the community is, right? So they wanna come into a place where there are other people who can help them figure out who they are, what their life will be like, et cetera, 'cause coming out is still a process, even though it's a lot easier now than it was two decades ago or four decades ago.
And so that is a big reason why people come into the product. And especially for people who live outside of big cities that's even more of a challenge, 'cause there's a big aspect of loneliness and trying to be like: How do I become comfortable with who I am? And people use it for that as well. So there is a big kind of social community component to Grindr that works really, really well.
Got it. And as you look at the TAM for your product, and the TAM for the overall, I mean, the TAMs that exist today, and I'm gonna ask, there'll be follow-on questions in terms of how do you ultimately expand that TAM? How big is the TAM? I mean, obviously, for all of you that have looked at the company's financials, the company does tremendously well, both in terms of top-line growth and the amount of cash flow it generates. But can you give me a little just background in terms of how you see the TAM today? How big is it? What is the opportunity for Grindr in terms of capturing greater TAM?
Sure, so how we think about TAM is we are a beneficiary of two macro trends that are out there. Number one, this, the general acceptance by more and more countries of the community. And so to provide a little context on that, we think about India as a good example, because India is a country that in 2018 it was illegal to be gay, and now in 2023, it basically went to the Supreme Court for marriage equality. Now, it didn't pass, but in a five-year period we went from sort of one extreme all the way to the other. So we're really buoyed by that tailwind. The second tailwind is simply the user base.
So like George said, our user base continues to stay young, and what we're seeing in multiple studies is that up to 20% of folks between the ages of 18 and 25 are calling themselves fluid, and so they're fluid in their identity. So we have those two factors that are weighing into our TAM, and that's making it larger and larger because now you can come out. And then basically based on those, those sort of, I would call them real tailwinds, you can see us translating that into our monthly active users.
Right.
And so our monthly active users have been growing very steadily, high single digits this year and certainly in the past, and what we're looking to do is to monetize now. So, as George said, it's been around for 15 years, been a phenomenal connector of the community, and has been less focused on really monetizing the community. And so we see our TAM growing from a user perspective, and that's translating into revenue, which we're seeing now.
Wonderful. That's great. So, difficult macro environment, depending on who you ask, we're in, hopefully, coming out of it. We're in the back end of what would be a difficult macro environment, which has quite frankly impacted, as you go through this conference, impacted numerous industries. How has this environment, this challenging macro environment, people call it macro headwinds, you know, how has it influenced Grindr, if at all?
So we certainly have got that question today, and we got it a lot yesterday, and really all I can say is that we are seeing strong growth. We put an 8-K out yesterday to reaffirm our guidance of 31% or higher for revenue growth this year and 41% or higher for EBITDA growth. And really what we attribute our resiliency to is what George said, is people wanna feel part of the community. It is their digital gayborhood, and so they continue to spend 60 minutes a day on our app.
Wow!
We have not seen that dip at all. What we're really also seeing is that, because we're just at the beginning of our monetization journey, our revenue continues to grow as we put out products that are more compelling for them to purchase.
Right. As you look at the Grindr product, do you view it as, and again, I love the question. Yeah, I don't know if the answer is the same for both of you. I mean, do you view it as a discretionary item in the eyes of your users, or do you view it more as stable in their lives?
No, I don't think it's discretionary. I think it's a mandatory.
Right.
I mean, look, the gay user base went online for engagement way before anybody else did, right? I graduated from college in 2000. I moved to D.C., and, like, everybody in D.C. was on this product called Manhunt.
Right.
This is like 2000, right? Like, very early days of the internet. Straight dating had by no means gone online at all yet.
Right.
So Grindr wasn't the creator of kind of online dating in the way, say, that Tinder was for the straight community. There were already dominant platforms out there. Manhunt was one, Adam4Adam was another one. Gay.com was also really big before Grindr. And then what happened with Grindr is that the mobile kind of really allowed it to win, right? Like they were the first ones to mobile. The other ones did not go to a native app format, and I think that really hurt them. Grindr was really successful. But having that from a usage perspective, Grindr is not a discretionary product. Now, we have to grow our paying users. We, our penetration of paying users versus our free users is not as high as, say, Bumble or Tinder. But a big reason is because Grindr wasn't built as a product where monetization was the focus.
Right.
Community was the focus. And then monetization was kind of like secondary. It never took any investor dollars. It is all done organically, so it's actually pretty remarkable how big the company is that has never raised any money.
Right.
But in the last, you know, three to four years, I think we started to think about monetization a lot more carefully. For a while, we had a team that was literally, "Oh, this is the free team, and this is the, the monetization team," which is not the way to think about product development. We actually collapsed it into one team, and there's now pods of like pod for this and pod for this and pod for this, and each pod has to think about monetization. So I think over time we can drive monetization up in a significant way, and we're very confident about that. But as a product, Grindr is not a discretionary product, it's like a mandatory product.
It's interesting you brought up Tinder and Bumble and, you know, as you look at Grindr versus what I'd characterize as other online dating apps. I mean, the percent of your revenues that you spend on marketing is a fraction of the others. Can you talk a little bit about why that is the case? I mean, what makes Grindr unique in that the marketing spend is, I wanna say, a third of the others?
I think there's a couple of factors. Number one, because we've been around for 15 years and the whole focus has been connection. In 190 countries, we're number one in 180 of them. Our top of funnel, we can actually fill much more inexpensively with viral products. And so one example of that is Albums. Albums went out in 2022, and there was over 1 billion photo albums shared among our user base.
Wow!
If you weren't on the app, you got on the app, you made an album, you sent it to your friends via the chat.
Right.
That fills the top of our funnel. What I would say is two other sort of related points with respect to marketing are, it's actually the real reason why we have a structural advantage in terms of our EBITDA margins versus anybody else.
Yeah.
We don't spend that kind of money, and frankly, we don't think we need to, because if you're coming out, and like what George said, you know, when you're 18 and you start the process of coming out, you really want to build a community. That really sits with Grindr. So I think that given there's ongoing macro growth of this greater acceptance and people being more fluid, that allows us to have more and more people kind of in the ecosystem. We continue to fill the top of the funnel through viral products that are free therefore we don't have to spend on what I would call expensive paid marketing.
Right.
I think, you know, we are such a big part of the community. Grindr has about an 85% unaided brand recognition among, the community in, in the U.S., which is pretty remarkable. I think it's actually 85% among everybody, because ever since I took this job, literally anyone who I tell them, "See you on Grindr," everyone knows except for two people. Everyone knows, like, completely makes no sense, right? Like, pretty remarkable. But, you know, it, it, when we do stuff in social, it actually has a really big impact.
Yeah.
For example, this quarter we launched a set of podcasts that have become a massive hit, and like literally millions of people are viewing them. We didn't do any marketing for them. We just kind of put them out there on YouTube and through our social, and it kind of took over. Where we need to do a better job, and I think it's a huge opportunity, is for us to tell our story a lot better. There are unfortunate, some real and some not real, things that are out there about Grindr, that are kind of wedded in people's minds as like things about the product. Some mistakes that Grindr has made in the past, no question, but also some assumptions that are not true.
We need to do a much better job kind of dispelling those and telling the real story of Grindr is, right? Last year, for example, we launched ability for people to get an HIV test to be sent to them, to their house working with the CDC. In half a year since that launched in the U.S., 235,000 people ordered an HIV test, and a third of those people had never had an HIV test before. So like, that, that's actually pretty remarkable, and it's literally saving people's lives. We don't talk about that as much as, or we, our media doesn't talk about that, et cetera, versus we talk about some things that happened seven years ago three managements ago related to privacy, which like, is a totally different world for us today.
And so that is where we need to do some work on kind of telling our story a lot better, because that'll help with our partners, that'll help with advertisers, that'll help with our investors as well, I think. that is an area where that's important for marketing as well.
Got it. We've brought up the concept of privacy. You've brought up the concept of kind of awareness, safety. I'd love to kind of take that safety concept, and you mentioned it earlier in your dialogue about safety remaining really paramount in terms of online dating platforms. How does Grindr's technology ensure safe interactions within the app?
Yeah, so safety and privacy are kind of two sides of the same coin. They're really important. For us, privacy is paramount, and there is reasons why. You know, first of all, we're in 190 countries, in 60 of those, it's illegal to be gay. So protecting the privacy of those users is beyond critical. We've frequently talked about, do you stay in certain countries or not? We go to the NGOs in those countries, and they literally plead with us to not leave. Because even though there are risks associated with being on Grindr, there's a much bigger problem if you don't have a way to connect at all, right?
I think my first board meeting, because I was on Grindr's board for about six months before I became CEO, was a discussion of a really terrible Middle Eastern place to be gay, with users from there pleading with us to, like, come reopen the product in that country.
Yeah.
It's pretty challenging. So privacy is really, really critical and we are very careful with that. For example, we don't share any of your data with third-party advertisers, which results in actually not the ad quality is not as great, but that's okay, because we care about privacy so much. As far as safety, you know, we do a lot of work on, in the app and on the app to ensure that we eliminate bots as much as we can, that we eliminate illegal activity as much as we can, and try to do that both reactively, when people report stuff, as well as proactively, before anyone reports it.
We've seen, in the last three years, we've seen incredible reduction of reports that we get from users of illegal activity, which is one way to track, like, are you doing a good job or not? Overall, about a 50% reduction in reports that we get, even though MAU has grown dramatically in that time period, right? So you'd think it'd be even more. And a lot of that has been because of content moderation that we do, so we have a pretty fairly large team of people, you know, that does content moderation, and bans accounts either temporarily or permanently, depending on what type of behavior they might be engaged in.
So when it comes to, you know, prostitution or solicitation, when it comes to, drugs or other illegal activities, we, like, ban accounts and we ban them permanently so they can't come back in. Obviously, same thing with, you know, anything related to underage, like a permanent ban. You, you can't be in the product, and actually report you to, to the authorities, because it's such a big deal. And then we also have an algorithm that runs in the product. We're really careful with this, like, in terms of what we actually go after in that case.
But if we see communication, in the app, in your chats, that is of illegal activity, again, drugs, underage, solicitation, we will take action even if nobody reports you, which has been one reason why I think reporting has gone down so much, is because we actually catch people before anyone experiences them versus after.
Got it. No, it's incredibly helpful. I'm gonna jump back for a second, just back to the industry, the broader online dating industry. Over the last several years, what I characterize as the stigma surrounding online dating has come down significantly, especially in major cities. As you look at the kind of the remaining stigma of online dating as it relates to Grindr, and it's, how do you look at that in terms of the ability to attract new users onto the platform?
I think in the gay, bi world, there's literally no stigma about being online.
Got it.
It's actually very convenient to be online, because fundamentally, for gay relationships, one of the biggest challenges is density, right? So even in the largest cities, the number of people that you're talking about that could be potential partners for you is actually fairly small, right? Let's take San Francisco, it's like roughly 600,000 people that live in San Francisco. San Francisco actually has a much higher gay population than anybody else, but let's say it's 12%. I mean, that's still, like, a very small number of people.
Right.
I mean, like, let's say 60,000-80,000 people that are your potential mates. And then you have to, like, cut that by age, 'cause you only wanna be with somebody in this age group. Then, like, is there a compatibility match sexually? Is there compatibility match personality-wise? You really cut down your pool in a pretty dramatic way. That's a big reason why it takes longer for gay men to end up being in a relationship. An average gay man gets married at 38 versus 28 for straight male.
Right.
And then secondly, why gay men travel so much, 'cause they need to meet people in new places, and so our users actually travel in a significant way. We have a way to solve that in Grindr now in ways that we couldn't do before. Because with AI and natural language processing, we can learn so much about you today that we couldn't before, and then we can try to match you with compatible partners, anywhere in the country.
Right.
That would be, I think, a really appealing product. Now, we've not built that yet. That's something that we wanna do in the future. But I think it really allows you to solve probably the single most critical challenge that gay men face in finding their long-term partners.
Got it. You talked about growth, you're talking about domestic versus international. Can you talk about the opportunities, and you talked, I mean, being in 180 countries. Can you talk about additional opportunities for growth, both domestically as well as internationally?
We think about our product as being a global rollout. And so what we've noticed is we rolled out the Weeklies in 2023, and what we noticed was that they performed equally well in any country in every continent. And so from our perspective, this really is a global product, doesn't need a lot of localization. I would say our localization at the moment is an opportunity, because we could improve our imagery, we could improve the translation, and certainly, the Purchase Price Parity, I would say, has a little bit more work to be a little bit more scientific. And so from a domestic versus international perspective, we're very global, and I would say very balanced.
As we put out products, we continue to see that perform equally well. Then in terms of, like, how we're really growing, we're really thinking about it from a payer perspective because our payer penetration at 7%, like George said, we've got plenty of room.
It's 7%?
It's around 7%, our payer penetration. And so we think of that as plenty of room to grow when the truth is, if other competitors are around 17%.
Right
We actually have two tailwinds again here, which is, number one, both sides of the house will pay, it's not just the guy paying, which happens in a lot of straight apps. And number two, monogamy is not a value that is valued. You can actually be in open relationships. In fact, 70% of guys are in open relationships, even when they're in, 70% of guys are still on the app when they're in a relationship. And so-
Got it
From our perspective, we have some nice tailwinds on growing our user base globally.
Got it. So if I were to look at your- What was the pricing again? It just seems like you've talked about it, I mean, it's
So we have two-
It's mandatory, kind of, you're saying it's not like an optional.
I think being on Grindr is mandatory.
Help us understand this, the 7% versus 17%?
Because the, y eah, so Grindr was built as a free product.
Right.
Right? Actually, initially, all the money was made through ads, and only later did they start thinking about subscriptions. The freemium product is extremely robust. If you take Grindr and then look at all the things you can do on Grindr for free, versus what you could do for free on Tinder or Hinge or Bumble, we are, like, way on the free side versus them. You can't message each other on Tinder basically if you're not paying, that's not the case with us. So, we don't wanna touch that. We do not want to take free things and make them paid, 'cause that would actually not be the best thing for our users. It would also hurt engagement, which we don't wanna do.
Our view is the way you drive payer penetration up is by creating new features and new products, and then creating value for that for people, and then getting them to pay for that, but that obviously takes a little bit longer.
And so-
But-
There's really two. Oh, sorry.
The reason we are at seven and those guys are at 15, 16, 17 is because they've been focused on driving payer penetration for years. We've been focused on it for, like, three years and in a much less kind of aggressive manner on the freemium side, versus what they've done.
If you think about the pricing question specifically, there's two, there's two tiers, a $19.99 and a $39.99. When we came in, we brought in a lower price point we called the weeklies. It's actually the same product, but for a lower duration. And what we found is, and if you noticed our numbers, we keep putting guidance up, is that our weeklies performed so well at the $12.99 point, that that lower tier really worked. Now, the truth is, there's a higher duration of those folks, and so that's bringing up our ARPU because now instead of paying $19.99 for the month, they're paying $12.99 a week. So that brings up our ARPU. And there was very little cannibalization. We also expected a level of cannibalization, as you would expect. We didn't have that.
So if you think about our competitors or the other folks in our space. They have multiple tiers. We haven't put out our dating tier yet. I think George was talking about it. That'll be more expensive because it's gonna be more valuable, and we only have two à la carte, Boost and Day Pass. Most other folks have around 10, so those things also drive ARPU. So we don't think about ARPU as much as we think about growing payer penetration through putting out these different tiers with different products that are basically solving for different use cases. We talk about being gay, but the truth is, there's cohorts inside of being gay, as you would expect, and inside those cohorts, we are now gonna develop those use cases for inside there.
Can you talk a little bit about the revenue streams? Can you talk a little bit about when you expect that? I mean, ideally, and again, I don't wanna talk about projections, can you talk a little bit about how you envision those new product streams to roll out and how that will roll into your current revenue base?
So we have two main revenue streams, right? Subscriptions i s by far the majority, and then advertising. We think that both can grow roughly at the same pace in the future, and then as we launch new products, they'll be either a la carte products that you pay for on a per-use basis, as an example, Teleport.
Yep
They'll show my profile in a different city than the one I'm in for X number of hours, I pay for it on a per-use basis. As well as things that we will put into subscription tiers, either current subscription tiers, driving more subscriptions for that tier, or creating a new subscription tier, either at the higher end or the lower end, where we make, you know, we get new people to convert that are not paying for something right now.
Got it. I know we have a few minutes left. I wanted to touch base a little bit on competition and then have some final words. But as it relates to competition, you know, you have some very large competitors that are beginning to move into the space. Can you talk about what your competitive mode or competitive advantage is relative to these others that are moving into the sector?
You know, competitors are gonna come and go as long as we're, I like to say, first in wallet product.
Right
We'll be in a good place, and the way to do that is by launching features that people really want. Again, I think we have underinvested in new feature development, and we are aiming to catch up on that, and I think we did a good job last year. We'll do a very good job on that this year as well. The biggest at-scale competitor that we have is a company called Scruff. They're about 1/4-1/5 our size in the United States.
So they are much smaller than we are, but they're still at scale. And they serve a subgroup of the population, not everybody. And then obviously, you know, we do know that our users do use Tinder, do use Hinge for dating purposes. That's actually a big reason why we think there's a huge opportunity. They use those products because they have features that they want, but they don't have the users. So what you'd hear from a lot of gay, gay men will be, "Hey, I was using Hinge because I like the feature set, but I can't find a mate because there's not enough people there." And so that gives us a sense that, hey, dating makes a ton of sense. Match has launched a company called, or a product called Archer, to try to target this community.
That has not gone very, very well, right?
Got it.
The numbers we've gotten for that are fairly low, which I think is makes sense because I think the launch of it didn't quite go the way you'd want it to go.
Got it. I know we have a few minutes left. Just a final thought to the question, and then I'll open up to a Q&A for the audience. What do you think is the biggest misconception, of Grindr by investors, and, and what should investors be focusing on going forward?
Well, I think I would say two things. One is this, that, hey, this is just like Bumble and Tinder, which it's not. It's a much bigger thing, and we spent so much time talking about that. And then secondly, one of the things I hear about, like, this conference, the conference yesterday, is, "Can you guys keep this margin?" And I think Vanna spoke about that.
Yeah.
We actually think we can keep this margin and do better as we reach scale, so we feel really good about that as well.
Perfect. One question from the audience, if there's anyone from the audience. My apologies, I know we're getting the cutthroat symbol, which is never good. Any questions for management?
We'll do it down there.
Great. Anyway, thank you very much.