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U.S. regulators raised concerns over Beijing Kunlun's ownership of the dating app and are now forcing the company to sell it. Now it will be sold by June 30, 2020.Â
UPDATE (May 14, 2019): Chinese gaming company Kunlun announced on Monday that they will sell their stake in the company by Summer 2020, according to Reuters.
A new owner has not been named, but the company made the announcment after reaching a deal with the Committee on Foreign Investment. The embattled company now has until June 30, 2020 to find new owners.
News of this change comes in the wake of rising trade tensions between China and the U.S. that have already greatly impacted the stock market.
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A Chinese company that owns Grindr is being forced to sell the popular dating app following pressure from the U.S. government due to security risks.
Grindr, the world's largest app for queer people, will now be auctioned off, according to Reuters. Investment firm Cowen has already started shopping for buyers at Grindr executives' request.
Sources say that the Committee on Foreign Investment grew agitated at Chinese ownership in part because the international sale skirted the committee's review. Gaming company Beijing Kunlun bought a majority stake in Grindr, which operates out of West Hollywood, in 2016, and then acquired the entire company in 2017.
However, the federal agency immediately raised national security concerns about the financial situation. Now the committee is sounding the alarm over Chinese ownership of applications that track information on U.S. citizens through a forced sale.
Grindr represents a small but significant part of Kunlun's portfolio, accounting for about 4 percent of the company's net profits last year.
CFIUS has no requirement to publicly disclose reasons for blocking an international investment, but experts say the committee has taken an interest recently in the sharing of personal data.
The federal government has also cracked down on products from Chinese companies like ZTE and Huawei over spying concerns. U.S. prosecutors have opened a case against Huawei for allegedly stealing T-Mobile intellectual property, according to The Wall Street Journal. The U.S. government has barred federal employees from using phones by the Chinese providers over concerns of backdoor technology allowing the Chinese government to collect data.
The agency in particular has stopped Chinese intervention in the money transfer company MoneyGram and in the mobile marketing firm AppLovin, Reuters notes.
Grindr bills itself as the world's leading social networking app for gay, bisexual, transgender, and queer people. Earlier this week, the company celebrated its 10-year anniversary.
