- Beijing Kunlun Tech offers $93 million for 60 percent stake
- Kunlun shares hit maximum daily limit in share trading
One of China’s newly minted technology billionaires signed a deal to buy a controlling stake in Grindr, the world’s biggest gay social-networking app.
Beijing Kunlun Tech Co., an Internet games company that helped introduce Angry Birds to China, offered $93 million in cash for 60 percent of New Grindr LLC, the company said in a statement to the Shenzhen stock exchange. Beijing Kunlun Chairman Zhou Yahui, who became a billionaire after the company listed shares last year, was scouting other potential investments in the U.S., according to a company spokeswoman, Sophie Chen.
Zhou, worth $1.7 billion according to the Bloomberg Billionaires Index, has overseen seven deals for Kunlun since April -- including Grindr and a minority stake in British mortgage lender LendInvest Ltd. The addition of the mobile app Grindr will broaden its portfolio of services and create a new source of revenue, the company said.
In February, developer Rovio Entertainment Oy said it signed an exclusive deal with Kunlun to develop a version of the hit mobile game Angry Birds tailored for Chinese players. Kunlun also has distribution rights for Supercell Oy’s Clash of Clans and Boom Beach, and Electronic Arts Inc.’s Need for Speed, according to Chen.
“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. “It’s essential to the Kunlun global Internet eco-sphere.”
Beijing Kunlun’s shares rose by the maximum daily 10 percent limit after it announced the pact. The deal awaits antitrust review by the U.S. government.
“We have taken this investment in our company to accelerate our growth,” Joel Simkhai, founder of Grindr, said in a blog post. “It will generally be business as usual for us here at Grindr, but with a renewed sense of purpose and additional resources.”
Dating apps are struggling to sustain revenue growth, partly because customers tend to stop paying for the service after they find a match. IAC/InterActiveCorp controls the majority of U.S. dating application market share through its ownership of Match, OKCupid and Tinder, while Grindr’s direct competitors include Scruff and Jack’d.
Grindr, which calls itself the world’s largest gay social network, hosts 2 million visitors daily across 196 countries, according to a company fact sheet. The Los Angeles-based mobile app was released in 2009 and matches users based on personal photos and location.
China’s attitude toward homosexuality has undergone a radical transformation in the past decade. Once a facet of Chinese culture among the elite, it was pushed underground during the Communist era, and the Chinese Psychiatric Association officially classified homosexuality as a psychiatric disorder until 2001.
Recently, the gay scene has seen a resurgence. Blued, a domestic gay social-networking app founded by a former police officer, has attracted more than 3 million daily users and secured funding from venture capitalists DCM Ventures.