Grindr announced on Wednesday that it is expanding further into health care with the acquisition of PurposeMed, the parent company of HIV prevention telehealth provider Freddie, in a deal worth $250 million.
The LGBTQ-focused dating platform will pay $190 million in cash and $60 million in Grindr common stock, according to the terms of the agreement. The agreement also includes up to $70 million in additional cash consideration tied to Freddie's performance in 2027, payable in 2028. The acquisition is expected to close in the fourth quarter.
The deal is Grindr's first major acquisition since the company was founded in 2009.
"Now we have the next business line that we believe will be as profitable as the core business, and the same size, if not bigger, than what the core business is today," said CEO George Arison in an interview with CNBC.
The acquisition comes as Grindr looks to build out its own LGBTQ healthcare platform Woodwork, which it launched in 2025, into a larger source of revenue alongside its core subscription and advertising businesses.
Arison said the company could have built the offering, but it would have taken two to three years to reach the same scale.
"You need to build out pharmacies, and you need to have clinicians to be able to fulfill the care that you're providing people," Arison said. "As you get more patients, then utilization improves, and then you're in a very high margin profile."
Grindr expects the combined U.S. telehealth and pharmacy business will generate more than $400 in monthly revenue per active patient, or more than $4,800 annually for a patient who remains in care for a full year.
At a scale of 50,000 U.S. patients, he estimates the business could represent roughly $240 million in annual revenue.
"We're doing exactly what we promised the street," said Arison. "I hope people view us as a platform company that is not just an online business, but rather multiple lines of business with a community that really cares about this product, and we care about them."
While the platform is expected to be immediately accretive to Grindr's EBITDA dollars, the company said that the investments needed to build out the U.S. operation will initially weigh on margins.
Arison said the company will share more details with shareholders in November about how much capital will be invested to grow the business, but he expects those margins to improve with scale and eventually approach the more than 40% margins of its core business.
Freddie, founded in Canada in 2020, expanded into the United States in 2024 and now serves patients in all 50 states and Washington, D.C. It has served more than 55,000 patients in the U.S. and Canada, according to Grindr, and provides telehealth services, testing, prescriptions and medication delivery.
The acquisition gives Grindr a way to integrate those services into its app, which is used by millions of people globally. Grindr estimates that about 400,000 U.S. users currently indicate on their profiles that they take PrEP, while more than two million additional U.S. users could benefit from the medication.
PrEP, or pre-exposure prophylaxis, can reduce the risk of acquiring HIV from sex by 99% when taken as prescribed.
Under the new model, users will be able to learn about PrEP, review coverage, connect with clinicians, arrange testing, obtain prescriptions and manage refills on the Grindr platform.
"My hope and dream here is that we'll take the 10% growth in PrEP that we see today per year, and maybe double that," Arison said. "If you did that, you're getting about 300,000 more people on PrEP over the next five years, and that's roughly about 5,000 patients not getting HIV."
The expansion into healthcare also comes as investors have focused on how Grindr can diversify monetization beyond its core business.
Morgan Stanley analyst Nathan Feather, in a July note on the stock, described Grindr as an underappreciated company with strong network effects, high engagement and significant profitability. The firm upgraded the stock to overweight from equal weight and raised its price target from $16 to $18, citing potential for greater product-led monetization.
Shares closed on Wednesday at $15.43.