Beijing Kunlun Tech Co Ltd, the new parent company to Grindr, is now expected to sell the GBTQ dating platform following pressure from The Committee on Foreign Investment in the United States (CFIUS).
CFIUS has reportedly informed Kunlun that its ownership of Grindr constitutes a national security risk. The news comes as app developers and other technology companies are facing increased scrutiny from US defence organisations – notable recent cases include Huawei, MoneyGram and AppLovin.
The US Government involvement comes just 14 months after Grindr was fully acquired by the Chinese tech giant. Kunlun paid $155 million for a 61.5% stake in 2016, before completing the purchase in January 2018.
According to Reuters, Kunlun did not seek approval from CFIUS for the acquisition. Failure to do so is one of the factors which may have made it vulnerable to an intervention of this kind.
The developments torpedo plans for a Grindr IPO, despite a filing already being made on the Shenzhen stock exchange in August. Grindr is said to have instead teamed up with investment bank Cowen Inc, who will oversee the sale via an auction process.
Reuters says the gay dating brand is “soliciting acquisition interest from U.S. investment firms, as well as Grindr’s competitors”.
Earlier this month, Grindr celebrated its ten year anniversary. The past year has seen it introduce the ‘Kindr’ initiative to tackle in-app discrimination, and launch an HIV data privacy summit in Los Angeles.
Read more here.