Chinese owner to be involved in Grindr’s operations after deal
It is unclear how both firms will boost each other’s prospects but the deal comes as China is cultivating a lucrative market catering to LGBT community
A little-known Chinese tech company has agreed to pay US$240 million for America’s Grindr so that it can become fully involved in the daily operations of the world’s largest gay social media app, as it expands and builds a loyal user base beyond China.
Beijing Kunlun Tech, a game developer owned by 38-year-old billionaire Zhou Yahui, said on Wednesday it planned to pay US$152 million to buy the remaining 38 per cent stake in Grindr that it does not already own. Kunlun paid about US$88 million for a 62 per cent stake of the social media app in January last year, which meant that the startup’s valuation has gained 161 per cent since the Chinese firm’s last purchase.
“[With the deal,] we also aim to be a world leading social media company in the future, and to expand our platforms into film, streaming and animation,” it said.
The takeover comes at a time when China, the world’s most populous nation but lagging the West in achieving equal legal status for its homosexual citizens, is cultivating a lucrative industry catering to the social needs of the gay community.
Grindr, founded in 2009 in the United States, is the world’s largest LGBT social-network application, counting over 27 million registered users across 196 countries and territories across the world.
The Chinese company expected to bank on Grindr as a new growth engine, as the eight-year-old app proved to be a cash cow that had posted US$13.7 million in net profit for 2014, thanks to its rapidly growing membership.