grinder announced Wednesday that it will acquire PurposeMed, the parent company of HIV prevention telemedicine provider Freddie, in a deal worth $250 million, further expanding into the healthcare space.
Under the terms of the deal, the LGBTQ-focused dating platform will pay $190 million in cash and $60 million in Grindr common stock. The agreement also includes up to $70 million in additional cash consideration related to Freddie’s performance in 2027, to be paid in 2028. The acquisition is expected to close in the fourth quarter.
The deal marks Grindr’s first major acquisition since it was founded in 2009.
“We now have a next line of business that we believe will be as profitable as our core business and will be as large or larger than our current core business,” CEO George Allison said in an interview with CNBC.
The acquisition comes as Grindr aims to build its own LGBTQ healthcare platform, Woodwork, launched in 2025, into a larger revenue stream alongside its core subscription and advertising businesses.
Allison said the company could have built the service, but it would take two to three years to reach the same scale.
“We need to build pharmacies, and we need clinicians to be able to provide the care that we’re providing to people,” Allison said. “When you get more patients, you increase utilization and you get very high profit margins.”
Grindr expects its combined U.S. telemedicine and pharmacy businesses to generate revenue of more than $400 per month per active patient, or more than $4,800 per year for patients who continue treatment for one year.
At a scale of 50,000 U.S. patients, he estimates the business would equate to about $240 million in annual revenue.
“We are doing exactly what we promised on the streets,” Allison said. “We hope that people see us as more than just an online business, but a platform company with multiple lines of business with a community that really cares about this product. And we value our community.”
The platform is expected to quickly increase Grindr’s EBITDA dollars, but the company says the investment required to build out its U.S. business will initially weigh on profits.
Allison said he will share details with shareholders in November about how much capital will be invested in growing the business, but expects its margins to improve as it scales and eventually approach the core business’s 40%-plus margins.
Freddie was founded in Canada in 2020, expanded to the U.S. in 2024, and currently serves patients in all 50 states and Washington, DC. Grindr says it serves more than 55,000 patients in the U.S. and Canada, offering telehealth services, testing, prescriptions, and drug delivery.
This acquisition gives Grindr a way to integrate these services into its apps used by millions of people around the world. Grindr currently shows about 400,000 U.S. users taking PrEP on their profiles and estimates that more than 2 million additional U.S. users could benefit from the drug.
PrEP (pre-exposure prophylaxis), when taken as prescribed, can reduce the risk of sexually transmitted HIV by 99%.
Under the new model, users can learn about PrEP, check coverage, connect with clinicians, arrange tests, get prescriptions, and manage refills on the Grindr platform.
“My hopes and dreams here are to achieve the 10% annual growth in PrEP that we’re seeing now and maybe double that,” Allison said. “That would mean about 300,000 more people would receive PrEP over the next five years, and about 5,000 people would become HIV-free.”
The expansion into healthcare also comes as investors focus on how Grindr can diversify its monetization beyond its core business.
In a July note on the stock, Morgan Stanley analyst Nathan Feather called Grindr an undervalued company with strong network effects, high engagement, and strong profitability. The company upgraded the stock from equal weight to overweight and raised its price target from $16 to $18, citing the potential for product-led profitability expansion.
The stock’s closing price on Wednesday was $15.43.
Grinder stock price chart.
