Tinder’s $5 billion valuation “is nowhere near the truth”

What a difference a zero makes. So, yeah, it turns out that Tinder isn’t valued at $5 billion after all. Try $500 million. Bloomberg, which originally reported the $5 billion valuation number flubbed up. The news outlet said earlier today that Barry Diller’s IAC/InterActiveCorp. paid $500 million from tech entrepreneur and venture capitalist Chamath Palihapitiya for a 10 percent stake in the startup.

Don’t believe those reports saying Tinder, the popular mobile dating app, is worth $5 billion. That number, first reported by Bloomberg and quickly picked up elsewhere across the web, is supposedly based on the $500 million IAC paid to buy a 10% stake in the company from venture capitalist Chamath Palihapitiya. But it’s not accurate — not remotely. “I can confirm on the record that we did a transaction with Chamath, but this valuation is nowhere near the truth,” Sam Yagan, CEO of IAC’s Match Group, told me via email. Match is the IAC division that houses its dating businesses, including Match.com, OK Cupid (which Yagan co-founded) and its majority stake in Tinder.