(Yicai Global) May 14 --Chinese investment firm Kunlun Tech has agreed to sell gay-dating app Grindr by June 2020 following an agreement with US authorities following security concerns stateside. 

The Beijing-based firm is not allowed to access user information and is required to sell the app by the middle of next year, according to a statement. It is also prohibited from transmitting any sensitive data to any entities in China.

Grindr is one of the world's largest social networking platforms for lesbians, gays, bisexuals, transgenders, and other groups with an alternative sexual orientation for whom it seeks to win recognition from society and provide better social welfare. Kunlun was in the midst of preparations for Grindr's initial public offering, the Beijing-based company said in a statement in August.

Under the agreement, the US government reserves the right to require Kunlun Tech to search for trustees for the transfer of all the rights and interests that it directly or indirectly holds in Grindr if it is unable to meet the deadline. Kunlun will gain all income from the sale. 

Grindr is also required to cease all operations in China and no longer make any new hires or appointments from Kunlun's team. The app's headquarters will remain in the US along with operations and management functions. 

Kunlun purchased 61.5 percent and 38.4 percent stakes in Grindr for USD93 million and USD152 million, respectively, in January 2016 and July 2017, and completed a full takeover in January 2018. Its active users are mainly in Europe and the US. The platform's annual net assets reached USD12.8 million last year with business revenue of USD86.4 million and a net loss of around USD3.5 million. 

The divestment will not greatly influence the Chinese firm's independence and business performance, the firm said. 

Editor: William Clegg