Gay dating app Grindr has partnered up with a Chinese gaming company for its first-ever outside investment. Beijing Kunlun Tech Co., the company that helped introduce Angry Birds to China, offered $93 million in cash for 60 percent of New Grindr LLC.
Beijing Kunlun Chairman Zhou Yahui came across the opportunity while scouting other potential investments in the U.S., said a company spokeswoman, Sophie Chen. Grindr is one of seven deals Zhou has overseen for Kunlun since April. The company hopes its newest addition will broaden its portfolio of services and create a new source of revenue. It is expected to leverage Grindr's popularity to augment income from outside China by directing users towards its games.
“Grindr is the top platform in their area and is mostly known as data-driven, as well as for their great user base,” Chen said in an e-mail to Bloomberg. “It’s essential to the Kunlun global Internet eco-sphere.”
Although the deal awaits antitrust review by the U.S. Government, Bloomberg reports that Beijing Kunlun’s shares rose by the maximum daily 10 percent limit after news of the pact went public.
The move isn't a surprise for those who have been following Grindr's maneuvers behind the scenes. The app had been exploring a sale or fundraising round for much of last year in hopes of accelerating its growth beyond the matchmaking sphere.
In the wake of Kunlun's majority investment, Grindr has been valued at $155 million and founder Joel Simkhai assured users that it would be “business as usual” for the app in an open letter posted on the company blog.
“For nearly seven years, Grindr has self-funded its growth, and in doing so, we have built the largest network for gay men in the world,” he writes. “We have taken this investment in our company to accelerate our growth, to allow us to expand our services for you, and to continue to ensure that we make Grindr the number one app and brand for our millions of users.”
Simkhai also promises “a renewed sense of purpose” and “additional resources” post-investment, as well as new features and services planned for 2016.
Grindr, founded in 2009, hosts 2 million visitors daily across 196 countries, according to a company fact sheet. Despite its runaway success, the Los Angeles-based mobile app does not list China among its top 10 markets by daily active users. The US takes the top spot, followed by the UK, Mexico, Brazil and France.
China’s attitude toward homosexuality has changed radically in the past decade, meaning the scene could finally be set for Grindr to expand within the country, although it will face stiff competition from a domestic gay social networking app (founded by a former police officer) called Blued.