The New York-based owner of dating brands including Tinder, Match and OkCupid is to press ahead with a flotation valuing the group at $3.1bn (£2.1bn).
Match Group will be hoping sufficient investors “swipe right” to get the deal off to a good start. Over the past month, almost every initial public offering (IPO) has priced below its range amid lingering nervousness about new issues initially raised by the Chinese stock market crisis.
Last week the $3bn flotation of the food delivery business Hello Fresh was postponed in Frankfurt, with the group citing uncertain market conditions. At the end of last month the same fate befell the intended flotation in France of the loss-making music streaming service Deezer.
However, Match is a profitable internet business, reporting profits of $148.4m in 2014, up 17%. Revenues rose by 11% to $888.3m.
Some analysts suggest the pace of revenue growth could slow as the group is forced to spend an increasing amount on product development.
The group includes the dating sites Chemistry.com, Delightful, HowAboutWe, Match, Meetic, OkCupid, People Media, Tinder and Twoo, as well as the fitness site DailyBurn and the tutoring businesses Tutor.com and The Princeton Review.
Match will be selling 14% of itself to new investors and hoping to raise $537m. But those who invest will only have 1.6% of the voting power, with the parent company, Barry Diller’s InterActiveCorp (IAC), hanging on to the remainder.
Tinder currently focuses primarily on photos, but there are plans to include more information to make personality feature more prominently.
Tinder’s chief executive, Sean Rad, said at a recent summit: “We’re about to announce a huge change we’ve made to the algorithm and we have increased the number of matches by over 30%.”
He said the app’s users would get “deeper connections” and would see a “series of things that will help you make more sense of the sheer volume of people around you”.
The company’s 80-page plus prospectus points out the risks of a security breach in the aftermath of the hacking of the database of the infidelity website Ashley Madison. It says: “We are subject to a number of risks related to credit card payments, including data security breaches and fraud that we or third parties experience, or additional regulation, any of which could adversely affect our business, financial condition and results of operations.”