Popular gay dating app Grindr that was being owned by the popular Chinese gaming giant Beijing Kunlun is being sold for $608 million. With this, the app would no longer come under Chinese ownership, thus ending a tumultuous, four-year-old journey.
A US-based firm named San Vicente Acquisition Partners has purchased about 98% stakes of the Grindr app from the Chinese gaming giant. Reuters have reported it.
The app was initially created in Los Angeles. However, it was purchased by Beijing Kunlun in 2016 for about $93 million. Post the acquisition by the Chinese based tech firm. The US-based government felt that the app posed some security concerns at the national level. These concerns threatened the data confidentiality of the citizens belonging to the US. The situation was so grave that, these US citizens could have been blackmailed too, owing to such security lapses. US government officials too could have been amongst these people
Furthermore, the details of the complete acquisition were not presented by Kunlun for review.
Owing to these developments, the Committee on Foreign Investment in the United States (CFIUS), which is the national security panel of the US government, thoroughly scrutinized the app to check if at all the app did have any security issues under the Chinese ownership.
Once the complete checking of the app was done, the CFIUS did deduce that the Grindr app posed national security risks and highlighted the same to Beijing Kunlun. Based on the review report, Kunlun was asked to sell off the ownership rights of the app. These security concerns forced the CFIUS to undo an already completed acquisition.
What was the threat looming within the app?
There were about 27 million users registered on the app’s database. CFIUS felt that the Chinese government could use this confidential data belonging to so many users. Sometime during the previous year, it was also reported that engineers from Beijing were being allowed to access the personal data of many US nationals. It included confidential data as well as the HIV statuses of these users. All this fiasco happened when Grindr was under Chinese ownership.
Beijing Kunlun had stated that it would be selling off the Grindr app around June 2020. It is the maximum deadline that has been granted to the Chinese gaming firm.
So far, not many details and facts are known regarding the San Vicente Acquisition. A person who is having an idea and details regarding the entire deal has stated that the company which acquired Grindr is made up of a small group of investors. This firm is owned and controlled mostly by Americans. According to Reuters, one of the investors is James Lu. Previously, James Lu was an executive at the well-known Chinese search giant Baidu.
All said and done. The deal would be considered as final only after the concerned shareholders approve the same. Moreover, the CFIUS needs to give a clean chit to San Vicente Acquisition Partners. For this, the CFIUS needs to completely review the details of the firm as well as the deal.
When a spokesperson from Grindr was questioned regarding the details of the deal, he declined to speak.
Image source: The Verge