Chinese Company Sells Grindr for $608 Million Following US Security Concerns

Chinese gaming company Beijing Kunlun has agreed to sell Grindr for 608.5 million USD. The location-based app describes itself as the “largest social networking app for gay, bi, trans, and queer people,” with millions of daily users in pretty much every country on the planet. Kunlun, meanwhile, specializes in publishing browser games like Eden Eternal and Glory Destiny Online.

It was a surprising buy. Kunlun acquired a 60% stake in the app in 2016 for 93 million USD, and completed the acquisition for another 152 million USD in 2018. According to CNN, Kunlun said in a statement that the deal would “improve its strategic position” as a “global platform.” After Kunlun failed to submit those transactions to the Committee on Foreign Investment in the US (CFIUS), the agency cited security concerns over user data — particularly from members of the US government or military, who could be blackmailed.

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Grindr came under fire in 2018 for sharing users’ HIV status with third-parties. Later that year, a third-party accessed the app’s private API and exposed users’ exact locations. Reuters also reported that Kunlun gave some of its engineers access to user information, and last May, after increasing pressure from CFIUS, Kunlun signed an agreement to sell Grindr by the end of this June.

Grindr will go to US-based San Vicente Acquisition Partners. According to Reuters, the company is “a group of entrepreneurs and investors in the tech, media and telecommunications industries.” James Lu, a former vice president at Baidu, is also one of the people working on the deal.

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Some users on Chinese social media platform Weibo called the deal an opportunist move by the US, noting that the CFIUS only intervened when Grindr made a profit of 23 million USD in the first three quarters of 2019 — up from its net loss of 4.13 million USD in 2018.

The sale highlights wider US security concerns over Chinese companies gathering data on American citizens. CFIUS pressure has already pushed Chinese investment in US tech firms from 18.7 billion USD in 2016 to 2.2 billion in 2018 in USD according to official statistics. The agency is also reviewing TikTok, the popular video app owned by China’s ByteDance.