Grindr still wants to go public: Chinese company behind gay dating app says it will revive IPO plan after US drops opposition
- Chinese gaming company Beijing Kunlun said in May it had agreed to sell Grindr
- That move set a June 2020 deadline and put preparations for an IPO on hold
- The company now says it will revive the plans after US says it has no opposition
Chinese gaming company Beijing Kunlun Tech Co Ltd said on Monday it would revive plans for an initial public offering (IPO) of popular gay dating app Grindr Inc, after a U.S. national security panel dropped its opposition to the plan.
Kunlun said in May it had agreed to a request by the Committee on Foreign Investment in the United States (CFIUS) to sell Grindr, setting a June 2020 deadline to do so and putting preparations for an IPO of Grindr on hold.
A source familiar with the matter said on Monday that Kunlun’s efforts to sell Grindr outright were continuing even as the IPO preparations were relaunched.
Chinese gaming company Beijing Kunlun Tech Co Ltd said on Monday it would revive plans for an initial public offering (IPO) of popular gay dating app Grindr Inc, after a U.S. national security panel dropped its opposition to the plan. File photo
WHAT IS AN IPO?
An IPO, or initial public offering, is the process of a company listing its stock on publicly traded markets.
The process becomes official when a company files a form S-1 with the Securities and Exchange Commission to register their securities with the agency.
At this point, the company has already secured a banker, such as Goldman Sachs, Morgan Stanley, etc., to underwrite their IPO.
Startups go public as a way to continue to grow the company, raise additional capital and potentially pursue mergers and acquisitions.
It also allows average investors to purchase shares in the company, beyond just venture capitalists and other private investors.
However, when a company IPOs, it means they’ll be subject to the daily whims of the stock market and Wall Street investors, which not only increases scrutiny, but also means heightens pressure from investors to deliver on their financials.
A Grindr spokeswoman declined to share more information about the IPO plans. Kunlun did not respond to requests for comment.
The U.S Treasury Department, which chairs CFIUS, did not immediately respond to a request for comment.
CFIUS has not disclosed its concerns about Kunlun’s ownership of Grindr.
However, the United States has been increasingly scrutinizing app developers over the safety of personal data they handle, especially if some of it involves U.S. military or intelligence personnel.
Reuters reported in May that Kunlun had given some Beijing-based engineers access to the personal information of millions of Americans, including private messages and HIV status.
Kunlun said in May it would shut down Grindr´s China operations and would not send any sensitive user data to China, in an effort to address concerns over data privacy.
Grindr will be listed on a stock exchange outside China, with the timing of the move to be decided according to overseas capital market conditions, Kunlun said in a filing to the Shenzhen stock exchange on Monday.
Kunlun is one of China’s largest mobile gaming companies.
It acquired a majority stake in Grindr in 2016 for $93 million and bought out the remainder of the company in 2018.
It did so without submitting the transactions for CFIUS review.
Kunlun’s control of Grindr has fueled concerns among privacy advocates in the United States.
Democratic U.S. Senators Edward Markey and Richard Blumenthal sent a letter to Grindr last year demanding answers about how the app would protect users´ privacy under its Chinese owner.
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