China tech firm to sell gay dating app Grindr for $608 million

BEIJING — One of China's biggest mobile gaming companies is selling popular gay dating app Grindr for $608 million after pressure from US authorities concerned over the potential misuse of user data. 

National security officials in Washington fear the platform -- which bills itself as the world's largest social networking space for LGBT people -- could be used by the Chinese government to blackmail Americans with government security clearances, according to media reports last year.

Beijing Kunlun Tech took a majority stake in the app in 2016 and bought the remaining equity two years later for a combined $245 million, but was reportedly ordered to relinquish the platform by US officials last year.

It will sell a 98.59 percent stake in Grindr to San Vicente Acquisition, a holding company based in the US state of Delaware, according to a company filing with the Shenzhen Stock Exchange on Friday. 

The deal is awaiting approval from a US committee authorized to review transactions involving foreign investments, the filing said. 

Grindr has faced other accusations of improperly managing the data under Beijing Kunlun's ownership.

The platform violated European Union privacy regulations by sharing the GPS data, age and gender of its users with third-party companies to help target advertisements, according to a report by a Norwegian consumer rights group.

Agence France-Presse 

China's Beijing Kunlun to revisit Grindr IPO

HONG KONG/NEW YORK - Chinese gaming company Beijing Kunlun Tech Co Ltd said on Monday it would revive plans for an initial public offering (IPO) of popular gay dating app Grindr Inc, after a U.S. national security panel dropped its opposition to the plan.

Kunlun said in May it had agreed to a request by the Committee on Foreign Investment in the United States (CFIUS) to sell Grindr, setting a June 2020 deadline to do so and putting preparations for an IPO of Grindr on hold.

A source familiar with the matter said on Monday that Kunlun's efforts to sell Grindr outright were continuing even as the IPO preparations were relaunched.

A Grindr spokeswoman declined to share more information about the IPO plans. Kunlun did not respond to requests for comment. The U.S Treasury Department, which chairs CFIUS, did not immediately respond to a request for comment.

CFIUS has not disclosed its concerns about Kunlun's ownership of Grindr. However, the United States has been increasingly scrutinizing app developers over the safety of personal data they handle, especially if some of it involves U.S. military or intelligence personnel.

Reuters reported in May that Kunlun had given some Beijing-based engineers access to the personal information of millions of Americans, including private messages and HIV status.

Kunlun said in May it would shut down Grindr’s China operations and would not send any sensitive user data to China, in an effort to address concerns over data privacy.

Grindr will be listed on a stock exchange outside China, with the timing of the move to be decided according to overseas capital market conditions, Kunlun said in a filing to the Shenzhen stock exchange on Monday.

Kunlun is one of China's largest mobile gaming companies. It acquired a majority stake in Grindr in 2016 for $93 million and bought out the remainder of the company in 2018. It did so without submitting the transactions for CFIUS review.

Kunlun's control of Grindr has fueled concerns among privacy advocates in the United States. Democratic U.S. Senators Edward Markey and Richard Blumenthal sent a letter to Grindr last year demanding answers about how the app would protect users’ privacy under its Chinese owner.

source: news.abs-cbn.com

Chinese firm buys majority of gay dating app Grindr

BEIJING - A Chinese gaming firm has bought a controlling stake in the hugely popular US gay dating app Grindr, despite homosexuality remaining a sensitive subject in the Asian giant.

Grindr, which calls itself "the largest network for gay men in the world", has millions of users globally. It is renowned for facilitating hook-ups, helping potential partners connect via photos, messaging and location details.

Its search criteria include body type, ethnicity or "Tribe": Bear, Clean-Cut, Daddy, Discreet, Geek, Jock, Leather, Otter, Poz, Rugged, Trans or Twink.

Beijing Kunlun Tech's soared 10 percent -- their daily limit -- on the Shenzhen stock exchange on Tuesday after it announced the $93 million deal.

Grindr is already available in China, and in a statement to the exchange Kunlun Tech -- one of China's biggest designers and operators of online games -- suggested it might be interested in the company as much for its networking technology, as for its particular niche specialisation.

"This investment in a social networking platform will further improve the company's strategic layout in the global Internet market," the statement said.

It added that its own experience operating Internet products in overseas markets, such as games, would help Grindr's business grow.

Los Angeles-based Grindr was founded in 2009 and the gay dating application -- versions of which are tailored for Apple or Android devices -- says it has more than two million daily active users in 196 countries.

Its 10 most active territories do not include China, where it competes with other foreign gay dating apps such as Jack'd as well as hugely popular homegrown options such as Blued and Zank, which sport interfaces similar to their international counterparts.

Blued says its app has been downloaded by 17 million users in mainland China, and another five million overseas.

- 'Vote of confidence' -China only officially decriminalised homosexuality in 1997, and listed it as a mental illness for another four years.

More recently tolerance has grown in larger Chinese cities, but conservative attitudes remain deeply engrained and discrimination against gays and lesbians is common.

In a company blog post, Grindr founder and chief executive Joel Simkhai touted the investment as "a huge vote of confidence in our vision to connect gay men to even more of the world around them".

The six-year-old start-up agreed to the purchase to accelerate growth and improve the mobile application for its users, according to Simkhai.

Simkhai founded Grindr with his own money and said it was the first time the firm had sold shares to an outside investor.

The deal -- which is subject to US anti-trust approval -- is for a 60 percent stake in Grindr, and Kunlun Tech will appoint three of the five members the US app's board, including its billionaire head Zhou Yahui, who will become its chairman.

Tuesday's share price jump took Kunlun Tech's market capitalization to 1.13 billion yuan ($170 million).

source: www.abs-cbnnews.com