A Chinese firm has sold gay dating app Grindr after being ordered to by American national security ... [+]
Topline: In the wake of concerns from the U.S. government about the privacy of 3 million daily users of the gay dating app Grindr, the app’s Chinese owners have agreed to sell for roughly $608.5 million.
- Beijing Kunlun Tech Co Ltd, one of the biggest mobile gaming companies in China, will sell its 98.59% stake to San Vicente Acquisition LLC Reuters reported Friday, a year after a U.S. regulator gave a June 2020 deadline to sell the app.
- Grindr has been the target of concern from U.S. lawmakers anxious about how user privacy is protected under its Chinese owner, particularly when the app is used by members of the military or intelligence communities.
- According to The Financial Times, the Committee on Foreign Investment in the United States held fears that the Chinese government would be able to blackmail users with information about sexual orientation and HIV status.
- Last year, Reuters reported information such as the private messages and HIV status of millions of American users on Grindr had been made available to engineers based in Beijing.
- In January, a report by a Norwegian government-funded nonprofit found that Grindr transferred user information like the name of the app and tracking to at least 12 companies, essentially marking users with their sexual orientation, according to The New York Times.
Key background: The forced sale shows the concern the U.S. government has when it comes to Chinese access to American user data. Similarly, Chinese-owned video app Tik-Tok is still under investigation, and U.S. soldiers have been banned from using the app on their work phones. Along with privacy concerns, TikTok has been hit with accusations of censorship and was forced to apologize after suspending a teenager who shared videos highlighting human rights abuses in China. Last year, a Chinese financial services company called Ant Financial were forced to abondon their plans to buy American fintech company MoneyGram after the sale was blocked by CFIUS over data privacy worries.
Tangent: The valuation of Grindr has reportedly quadrupled in the past four years since Kunlun made its first purchase of stakes in the company, snapping up 61.53% in 2016 and acquiring the rest of the 98.5% two years later. The remaining 1.41% of the shares will continue to be held by high-up Grindr employees after the sale is completed. Reuters reported that talks during the sale based Grindr’s valuation being $500 million.
