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Hannibal X 8 years, 3 months ago.
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Chinese gaming company Beijing Kunlun acquires 60%; gay male dating app Grindr for $93M
By Mike IsaacGrindr, the popular dating and social networking app for gay men, has found itself a match.
The company on Monday said it had sold a majority stake to the Beijing Kunlun Tech Company, a Chinese gaming company, valuing the six-year-old start-up at $155 million. Beijing Kunlun will acquire 60 percent of Grindr, with the remainder to be owned by Grindr employees and Joel Simkhai, the company’s founder. Grindr has previously not raised capital from outside investors.
“We have users in every country in the world, but in order to get to the next phase of our business and grow faster, we needed a partner,” Carter McJunkin, chief operating officer of Grindr, said in an interview. Mr. McJunkin said the pairing made sense for Grindr because of Beijing Kunlun’s digital expertise, and its agreement to let Grindr’s founders continue its operating structure and retain its current team.
For Beijing Kunlun, Grindr offers a chance to expand beyond its core gaming assets and into other lifestyle categories, as well as markets outside China.
“We have been very impressed by Grindr’s progress to date and are extremely excited about the future of the company,” Yahui Zhou, chairman of Kunlun, said in a statement. “We will continue to seek out and invest in high-quality technology companies led by top-tier management across the globe.”
Founded in 2009 by Mr. Simkhai with a few thousand dollars of his own money, Grindr has grown to become a mainstay of the gay hookup and dating culture in 196 countries around the world. The mobile app lets users see photos of one another based on their location, and users can share photos and text messages with one another.
Last year, Grindr hired the Raine Group to serve as its financial adviser as it fielded opportunities for acquisition or investment. Mr. McJunkin declined to comment on which companies Grindr spoke to during the process.
Grindr sees two million regular visitors every day, who spend an average of 54 minutes using the app, according to the company. Grindr’s revenue was about $32 million in 2014, according to a financial disclosure, up 29 percent from $25 million in 2013.
The online dating space has heated up in the last few years, as the InterActive Corporation, the digital media conglomerate, has systematically acquired and consolidated Internet dating properties. Last year, IAC spun off its dating companies into a separate company, the Match Group, which debuted on the Nasdaq exchange in November. Tinder, the popular mobile dating app, is that company’s crown jewel, and is especially popular among young audiences.
To grow beyond its current audience, Grindr tried its hand at courting other demographics — Blendr was the company’s attempt at a social network for more than gay and bisexual males — but those efforts have largely fizzled.
“We experimented in other audiences, but we decided we do the gay audience best,” Mr. McJunkin said. The company’s future growth prospects rest on “solving more problems” for Grindr’s core gay user group, including things like places to go and things to do, he said. “We’ve expanded to make it more of a lifestyle company,” he said.
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