Venture capital firms have been sniffing around Tinder, the Los Angeles-based dating app, since at least last spring. But according to one Valleywag source, Benchmark's Matt Cohler may soon sign one of Silicon Valley's most coveted term sheets. (On Sand Hill Road, it seems, fast growth is forever, while sexual harassment and discrimination suits can disappear.)

Our source said Benchmark is close to leading a $50 million to $75 million investment round in Tinder, whose majority stakeholder is IAC, Barry Diller's grab bag of digital companies. The investment round will value Tinder, a 22-month-old app, somewhere between $750 million and $1 billion, said the source. Tinder's ownership has always been a tangle of conflicting narratives. The goal of this deal, according to the source, is to spin Tinder out of Diller's corporate castle and revalue the app like only a venture capitalist can. Benchmark, which is on a hot streak, also backed Snapchat, the other viral L.A. story.

None of those details have been confirmed besides Cohler's interest in the company. I have reached out to IAC, Tinder, and Cohler, who did not immediately respond to comment. I will update the post if I hear back.

Earlier this year IAC reshuffled its dating properties—including OkCupid,, and Tinder—into a separate business called The Match Group. When the news was announced, Bloomberg said IAC was "setting the stage for a potential spinoff," with one analyst speculating that it could indicate "some kind of breakup situation." IAC has a long history of splitting up and selling off portfolio companies.

Back in April, Bloomberg—not an institution that normally traffics in rumors—incorrectly threw out the idea that Tinder was worth $5 billion. But that false report helped publicly clarify Tinder's internal valuation. Based on the fact that investor Chamath Palihapitiya sold his 11 percent stake in Tinder to IAC for roughly $55 million, Tinder's "worth" at the time was about $500 million, according to Re/code. Business Insider also reported a $500 million valuation later that day; we heard it was just shy of $500 million.

It seems that both Tinder CEO Sean Rad and The Match Group CEO Sam Yagan, essentially Rad's boss, want the Benchmark investment to happen. But Yagan's vote is the one that counts. Just last week, IAC told Valleywag that Tinder did not have permission to seek outside financing on its own.

According to the source, Tinder is also planning on letting go of existing staffers to make room for a more experienced management team. The changes will occur in finance, marketing, operations, product, and engineering. Based on the vile texts in the sexual harassment lawsuit from ex-exec Whitney Wolfe, human resources seems like Tinder's most pressing issue, but again, growth is always the top priority. Never let that hockey stick lose its shape.

At the end of July, IAC said Tinder's monthly active users (MAUs) were up 140 percent year-to-date with "June over May almost 2x May over April growth." But for perspective, the market for online dating services in the U.S. grew to $2.1 billion last year, according to IBISWorld. Smartphones are expected to increase the overall potential., a statistic site, ranks Tinder at no. 19 among usage of Facebook-connected apps. That puts the dating software before household names like Yelp, Pandora, and Twitter. The site also says Tinder is attracting 5.7 million daily active users (DAUs) and 14.1 million MAUs. To measure an app's "stickiness," or likelihood that it will be a hit, entrepreneurs sometimes look at the ratio of DAUs to MAUs. Using those figures, Tinder's ratio is 40 percent—on the high side depending on whether you think of Tinder as a game or a social app. AppData, another metrics site, ranks Tinder no. 20 in terms of DAU/MAU engagement, above Facebook itself.

Forbes' Jeff Bercovici said there was some validity to the perspective that Tinder is a game, not a dating app:

"...[that perspective] is consistent with several things Rad said to me about Tinder. People use it at the same rate whether they get matches or not. In smaller markets, once users have swiped through every possible match, many of them will delete their account and then sign up anew for the sheer fun of doing it all again."

It's obvious why Benchmark would want to invest in Tinder. If the rumored deal is in fact underway, it's not as clear why IAC might be willing to give up some of its equity in such a popular app. In April, Re/code reported that IAC owns more than 70 percent of Tinder. I heard around 60 percent, also unconfirmed.

Here's a condensed backstory: Tinder is under IAC's umbrella because it was launched as part of Hatch Labs, Dinesh Moorjani's digital sandbox for startups backed by both IAC and Xtreme Labs. Palihapitiya, founder of Social+Capital Partnership gained a stake in Tinder when he bought a majority stake in Xtreme Labs in 2012.

Besides Moorjani's sizable share, some ex-Hatch Labs folks stand to get a tiny fraction of equity in Tinder if an event occurs before October 15th, but it doesn't seem like the kind of payout that would delay a plum deal.

This past December, Yagan told Valleywag:

Match owns Tinder you can see that by the way we consolidate their financials. I mean if we didn't own Tinder—it's not like we just all of a sudden woke up one morning and said we should claim ownership of a company. We launched Tinder last year [...]

We consolidated it, we started it, we own it.

His comments were in response to a rumor I heard that VCs buzzing around Tinder decided they didn't have a chance. Since then, Yagan has been implicated in the sexual harassment lawsuit for ignoring the conduct of cofounder Justin Mateen and Yagan has had to publicly dispel the $5 billion valuation report that definitely didn't come from Camp IAC, which has to answer to public shareholders.

IAC's most recent SEC filing said revenue for The Match Group increased 8 percent in the past quarter to $214.3 million driven by a 7 percent increase in Dating revenue. None of that came from Tinder. Match is currently no. 10 among top-grossing apps in the Apple App Store and OkCupid is no. 28, even though Tinder ranks higher than them among free apps.

During IAC's last earnings call, Greg Blatt, the chairman of The Match Group, could not get away from question after question about the app, in particular how IAC planned to make money off of Tinder. He said the process would start late in the third quarter or early in the fourth. Blatt admitted that IAC made a misstep by focusing dating efforts on the mobile web, rather than mobile apps, "missing out on big customer acquisition opportunities."

So, why not let the Snapchat investors share the burden of turning Tinder into cash?

This is a breaking news and we will update the post as we learn more. To contact the author of this post with information about Tinder, please email

[Image via Getty, graphs via]