Grindr got some pandemic aid money, but should it have?
The U.S. Treasury Department has been dispersing pandemic aid to small businesses. At least, it was supposed to be for small businesses. The PPP was designed to rescue millions of small businesses that are struggling due to the coronavirus lockdowns. But according to CBS News, several big companies got their hands into that basket as well. That includes the gay hookup/dating app Grindr.
As the New York Post reports, Grindr was among the hundreds of thousands of businesses that have received money from the government’s $660 million pandemic aid program. In fact, Grindr received between $1 and $2 million in loans. According to the Treasury, the funds helped Grindr to keep 69 of its employees. On one side, this is great news. But, there are some questionable aspects to this situation. Namely, should Grindr be considered a “small” business?
Earlier this year, Grindr’s ownership was switched out after the U.S. government considered the Chinese gaming company Beijing Kunlun Tech Co Ltd a national security risk. The company was then bought by an investor group called San Vincente Acquisition LLC for more than $600 million. The company is also considering selling stock to the public. And as the New York Times writes, “Grindr generated net profit of about $31 million in 2019, according to Kunlun’s annual report.”
With all that money behind it, can Grindr really be considered a “small” business? One of the new owners doesn’t think so, as he told the L.A. Times in an interview just last week. Rick Marini, the new Chief Operating Officer, acknowledged that the company is doing well financially.
“This is a company that’s doing well over $100 million of revenue [annually],” Marini told the New York Times. “It is highly profitable and growing quickly. When Kunlun came in roughly three years ago to acquire the company, it was not nearly as large as it is today. I would say that the valuation paid accurately reflects that growth.”
But, Grindr was not the only big business to get money from the PPP loan funds. As The NY Post points out, Kanye West’s Yeezy apparel brand also received money from the U.S. government. The Yeezy brand received $5 million from the PPP, according to the SBA. This money was reportedly used to save 106 jobs since April 13.
Other companies that received loans were retailer ABC Home and Carpet, Alexander Wang, Silicon Valley venture capital firm Andreessen Horowitz, the Burning Man festival, and lingerie company Hanky Panky. All of which received between $1 million to $5 million in loans and aid. Then hose companies, of course, are only a small fraction of the many companies that were given money through the PPP.
Is this all business as usual or is there something more going on here?