Beijing Kunlun Tech Co., a Shenzhen-listed Chinese gaming company, released an announcement that its wholly-owned subsidiary Kunlun Group Limited bought 98,448,000 shares of US gay dating app New Grindr last Friday, 60% of the total equity. These shares were previously held by Grindr Holding Company, reported TechWeb on Tuesday.
The total investment amounts to USD 93 million, which means the six-year-old start-up Grindr is valuated at $155 million. Kunlun Group will appoint three of the five members of the board, among which the chairman of Kunlun Tech will take the position of chairman of the board at Grindr.
Carter McJunkin, COO of Grindr, said the pairing made sense for Grindr because of Beijing Kunlun’s digital expertise, and its agreement to let Grindr’s founders continue its operating structure and retain its current team, according to the New York Times.
For Kunlun Tech, this investment into the field of social networking is a strategic step in Kunlun’s mapping of its global internet eco-chain. It helps to expand Kunlun’s market outside China, to stride beyond its core gaming assets and to interlace the users of the social network platform and its own gaming platforms.
Grindr is a Los Angeles-based company founded in 2009. Its co-founder Scott Lewallen wrote in a post in 2014 that Grindr was the first gay geosocial app to launch in the iTunes App Store and had since become the largest and most popular gay mobile app community in the world.
It has grown to 196 countries with more than 10.5 million registered users, among which 30% are American. Grindr has over two million daily regular users, who spend 54 minutes every day on the app, beating Facebook users.
According to financial data from the company, Grindr earned USD 31.74 million in 2014, of which USD 13.74 million is net profit, an increase from 2012’s net profit of USD 659,300. Grindr’s revenue mostly comes from paid membership and ads.
There are quite a few online LGBT communities in China, including Blued, Zank and Gee Yuu. Blued says it has amassed over 2 million users and gained preeminence in the market of Chinese gay networking mobile apps by taking 84.57% of the market share. According to the CEOs of these three companies, they see it as good news for a Chinese listed company to purchase Grindr. They hope this will help Chinese gay match-making apps draw more attention from China’s capital market. With its two million daily active users, the CEOs all think Grindr is under-valuated, reports DoNews.
(Top photo from Baidu Images.)