Monday, May 20, 2024

Chinese firm puts Grindr up for sale after being declared security risk

Chinese gaming company Kunlun, who purchased Grindr in 2016, has put the popular dating app up for sale after the US government national security panel raised concerns about its ownership. 

The Committee on Foreign Investment in the United States (CFIUS) informed Kunlun that its ownership of California-based Grindr constituted a national security risk.

Reuters reports:

“CFIUS’ specific concerns and whether any attempt was made to mitigate them could not be learned. 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.

Kunlun had said last August it was preparing for an initial public offering (IPO) of Grindr. As a result of CFIUS’ intervention, Kunlun has now shifted its focus to an auction process to sell Grindr outright, given that the IPO would have kept Grindr under Kunlun’s control for a longer period of time, the sources said.

Grindr has hired investment bank Cowen Inc to handle the sale process, and is soliciting acquisition interest from U.S. investment firms, as well as Grindr’s competitors, according to the sources.”

This development represents a very rare example of CFIUS undoing a completed acquisition. Kunlun’s two deals (in 2016 and 2018) which saw them take control of Grindr weren’t submitted to CFIUS for review which made them vulnerable to this manner of intervention.

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