South Korean social media startup Hyperconnect has been acquired by U.S. online dating company Match Group, six months after it dropped plans for an initial public offering on the local bourse and sought fundraising from foreign investors instead.

Match Group, which owns and operates a global portfolio of popular dating apps, including Tinder and Hinge, announced in a press release that it had agreed to buy the South Korean company for $1.725 billion in a deal that surprised market watchers.

Hyperconnect hired Morgan Stanley to find an investor, hoping to raise 300 billion won to 400 billion won at a valuation of 1 trillion won ($907.2 million). Match Group, a $45 billion Nasdaq-listed firm, was one of the bidders that showed the strongest interest.

Attracted by Hyberconnect’s technology and business offerings, Match Group proposed a buyout of the company instead of investing in a minority stake, and the two parties eventually reached an agreement.

“Hyperconnect’s live video and audio engagement technology is a powerful tool that enables users to connect with new people and cultures on a global basis,” Shar Dubey, chief executive officer of Match Group, said in the release.

“We will leverage our deep bench of expertise to help accelerate Hyperconnect’s already-impressive growth, look to deploy Hyperconnect’s technologies across our existing portfolio and continue to invest in their growth.”

Founded in 2014 by alumni from Seoul National University and Pohang University of Science & Technology, Hyperconnect mainly operates video-chatting app Azar.

Since its launch in 2014, Azar has gained popularity, especially among users in the Middle East and Europe. The app instantly translates voice and text messages and is available in 19 languages across 230 countries. It ranked near the top of the list of Europe’s top revenue earning non-gaming apps in 2020.

Hyperconnect raised $2 million in 2014 in seed money from Altos Ventures and raised $8.6 million in 2015 in a Series A funding from Altos Ventures and SoftBank.

The company’s earnings before interest, tax, depreciation and amortization increased from 500 million won in 2015 to 22.1 billion won in 2019. Most of its revenue comes from outside South Korea. Match Group said Hyperconnect is profitable and generated more than $200 million in revenue in 2020, a 50% increase from 2019.

The transaction is expected to be finalized in the second quarter of this year. (Reporting by Hee-yeon Han)

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