US Foreign Investment Committee Puts Kunlun Tech on Hot Seat Over Gay App
Tang Shihua
DATE:  Apr 02 2019
/ SOURCE:  yicai
US Foreign Investment Committee Puts Kunlun Tech on Hot Seat Over Gay App US Foreign Investment Committee Puts Kunlun Tech on Hot Seat Over Gay App

(Yicai Global) April 1 -- Chinese well-known technology investment company Beijing Kunlun Tech is in talks with a US regulator about the future of its gay social networking application Grindr, but has not yet reached any conclusion, the firm said yesterday.

Kunlun Tech announced this as clarification in reply to a report from foreign media last week, which said US Committee on Foreign Investment has ordered Kunlun to sell the app, which it previously took over completely, out of fear it will threaten US national security. Kunlun has hired an investment bank to sell Grindr and started to contact prospective investors who are interested in it, the statement said.

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.

Kunlun Tech paid about USD93 million to buy the 61.5 stake in Grindr with Kunlun Group being its investing entity in early 2016. It further invested USD152 million to acquire the remainder of the target in July of 2017.

The current world's largest gay social networking platform, Grindr has more than 40 million registered users in 196 countries globally, with over 8 million monthly active ones, mainly come in Europe, North America and various other developed countries and regions. Those from the US account for about 30 percent, public data show.

The US Committee on Foreign Investment is the cross-departmental organization made up of representatives of the Department of the Treasury, Defense and others who review mergers and acquisitions by foreign investors that result in foreign-funded control over US firms to see whether they entail risks or not.

CFIUS has rejected some investment in US firms by Chinese capital on national security grounds in recent years. 
It previously blocked Chinese companies' takeovers of Moneygram and AppLovin out of security considerations. It is not required to explain the reasons for nixing such deals, since doing so could reveal classified information, New York-based Vox Media's online tech news portal The Verge reported.

Editor: Ben Armour

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Keywords:   Beijing Kunlun Tech,Social Media