Beijing Kunlun Tech announced that the decision to sell its 98.59% stake in popular gay dating app Grindr to American company San Vicente Acquisition LLC has been approved in a board’s meeting.
According to the company’s announcement, the deal is priced at 4.22 billion yuan ($609 million) and is expected to generate an investment income of roughly 3.16 billion yuan over the course of four years. Kunlun said the proceeds will add to its working capital and help it continue to implement its investment strategy in Internet of Things and artificial intelligence.
Kunlun first invested in Grindr in 2016 by purchasing 61.53% of the dating app’s shares for $93 million. A year later, the Beijing-based company bought the remaining shares with $152 million and became the sole owner of Grindr.
Last year, Reuters reported that Committee on Foreign Investment in the United States (CFIUS) asked Kunlun to divest Grindr, citing data privacy concerns. CFIUS had set a deadline of June 2020. Kunlun later agreed to the request and said it would close down Grindr’s China operations and restrict access to sensitive user data on the Chinese side.
This is not the first time that CFIUS intervenes in acquisition of American companies by Chinese investors. It has declined intentional acquisitions and ordered divestment several times related to safety concerns of personal data and national security risks.
Self proclaimed as the world’s largest social networking app for gay, bisexual, transgender, and queer people, Grindr has over 4.5 million daily active users.