Billionaire Barry Diller took the stand on Monday to defend his media empire from a lawsuit claiming that it cheated the founders of Tinder out of $2 billion.
The hookup app’s co-founder and former CEO Sean Rad claims that Diller’s companies — IAC and Match Group — gave outside investment bankers fake “doom-and-gloom” financial projections during a key valuation process in 2017. They say the banks then valued Tinder at $3 billion when it should have been worth at least $13.2 billion, dramatically reducing payouts to the co-founders and other early employees.
Under questioning from Rad’s attorneys, a defiant Diller strongly denied that he ordered subordinates to lie to banks, calling the idea “absurd.”
“It would be wrong,” said the 79-year-old tycoon in reference to the idea of lying to banks.
As evidence that Diller allegedly tried to intimidate Rad, Rad’s attorneys pointed to a May 2017 email where Greg Blatt, a longtime Diller ally who succeeded Rad as Tinder CEO, wrote that Diller wanted to “go after” Sean Rad and his family for “everything they have” — in apparent retaliation for the founder complaining about the valuation process.
The mogul denied trying to menace Rad, saying, “I can kind of conclusively say that I’ve never threatened anyone.”
Blatt himself is scheduled to testify at some point before the trial wraps up in late November or December. The parties could also opt to settle for somewhere from $300 million to $700 million before the trial ends, according to Susquehanna litigation analyst Thomas Claps.
Diller — who wore a striped navy suit and a clear facemask to Manhattan Supreme Court — appeared to grow exasperated with Rad’s attorneys, saying “Oh my god” twice during questioning. And while he credited Rad with coming up with Tinder’s iconic swipe-oriented design, he argued that the app likely wouldn’t have reached profitability without years of financial backing and guidance from Match, which also owns dating apps like Hinge and OkCupid.
“The Match people had become really experts at taking free properties and turning them into businesses,” said Diller, who Forbes estimates is worth a whopping $5.3 billion. “[Match’s] model is literally implanted into Tinder.”
Rad — who founded Tinder in 2012 while working for a Diller-controlled startup incubator called Hatch Labs — took the stand last week to detail his accusations against Diller’s companies. He said that the contested valuation process — which ultimately netted him nearly $400 million but he claims should’ve given him more than $1 billion — left him with mental scars.
“I had PTSD, been going to therapy, I’d been working on myself,” Rad said on Friday of his mental state after the 2017 valuation process.
Rad also said that the experience helped inspire investments he later made in an online health startup.
Spokespeople for Rad and Match did not immediately reply to requests for comment.