Contributed by: kellyseal Wednesday, September 18 2019 @ 05:34 pm
China’s gay dating app Blued is making its next move – an IPO in the U.S. market.
According to Bloomberg[*1] , the largest app for the LGBTQ community in China is planning to raise about $200 million through the IPO. The sale will likely take place next year, and the company could be valued as high as 1 billion US dollars.
Blued was founded by a former policeman named Geng Le in 2012, and now has more than 40 million users and garnered more than $130 million in venture capital as of March of this year, according to Bloomberg. The app offers live streaming and gaming in addition to online dating, and also connects men who want to become parents with surrogates overseas. These types of services are also part of Blued’s strategy to generate additional revenue outside of the traditional dating app.
Geng has his sights set on the U.S. market because it’s an easier process and provides a deeper market where a large number of shares can be bought or sold without drastically affecting the price. But the despite the market potential, Geng has a tough sell in front of him.
Part of the challenge, as Bloomberg pointed out, is that LGBTQ rights are tenuous in China because of a tightly controlled state. Although homosexuality is no longer illegal, old cultural misperceptions and prejudices still persist. Also, President Xi Jinping has sought tighter control over social media platforms. The potential for the government to monitor certain people or behavior using the app could cause people to leave or not join the app at all. Though Blued has grown to more than 40 million users, Geng could have a difficult time convincing investors of the app’s potential for growth in a country with these kinds of challenges.
Interestingly, another popular gay dating app Grindr – the biggest LGBTQ social networking app in the world - is owned by another Chinese company, Beijing Kunlun Tech. Kunlun is being forced by the U.S. government agency Committee on Foreign Investment in the U.S. to sell Grindr due to national security concerns. Particularly, the agency is concerned about members of the military and intelligence agencies using the app, who could be monitored or exploited for information, putting national security at risk.
Despite these concerns, Kunlun is still moving forward with its proposed IPO after a year-long halt.
Geng faces additional scrutiny for his app after allegations earlier this year that Blued was allowing minors to use the app without verifying their ages, putting them at risk. Blued had to temporarily stop accepting new users for over a week in January to address the problem, and has since put more restrictions in place. The company said it is open to having more inspections regarding this in the future.
For now, Bloomberg says Blued has been meeting with potential advisors about the IPO listing, but hasn’t publicly acknowledged the plan.