A person looks at the Grindr app in the App Store on a phone in Los Angeles on March 27, 2019. A Chinese firm has been ordered by American national security officials to sell popular gay dating app Grindr, The Wall Street Journal reported on March 27. (CHRIS DELMAS/AFP/Getty Images)
A Chinese firm is seeking to sell the popular gay dating app Grindr after a U.S. government national security council deemed the app a security risk, Reuters reported Wednesday.
The Committee on Foreign Investment in the United States (CFIUS) has told Chinese gaming company Beijing Kunlun Tech Co Ltd that Grindr constitutes a national security risk, two sources told Reuters. Grindr, originally based in West Hollywood, was purchased by Kunlun in 2016.
The U.S. government is closely monitoring foreign app developers because the apps collect personal information, leaving officials especially concerned if app users are members of U.S. military or intelligence.
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Grindr’s owners said in August they were selling the company through an initial public offering (IPO), but the reports from the CFIUS have reportedly convinced Kunlan to pursue different sales process. Instead of pursuing an IPO, that would have kept Grindr under Kunlan’s control longer, the Chinese firm decided on an auction process to sell Grindr outright.
The Chinese company achieved the majority stake in Grindr for $93 million in 2016. Kunlan acquired the company through a series of separate negotiations between 2016 and 2018 but never formally submitted the acquisition to be reviewed by the CFIUS.
Grindr, which claims to be the world’s largest social networking app for gay, bisexual, transgender and queer people, has come under fire for sharing the HIV status of some of its users, reported Fortune. 27 million users were on Grindr in 2017. Users allow the app access to their personal information, including location, private messages, and HIV status, according to Grindr’s privacy policy.
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U.S. senators Edward Markey, D-Mass., and Richard Blumenthal, D-Conn., sent a letter to Grindr in 2018 demanding the Chinese firm detail how it planned to protect the privacy of its users. The CFIUS intervened in the Grindr deal in order to secure the personal safety and data of users from being freely distributed by foreign companies.
The committee also blocked Chinese companies from purchasing the U.S. money transfer company MoneyGram International Inc and mobile marketing firm AppLovin due to similar concerns.
Kunlan hired the investment bank Cowen Inc. to handle the sale of Grindr. Several U.S. investment firms are interested in buying the company, reported Reuters.
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