Grindr is at the Forefront of the Chinese Trade Wars

Published on March 27, 2019

Yes, the gay dating app.

The Committee on Foreign Investment in the United States has ordered the Chinese owners of the gay dating app, Grindr, to sell the company back to an American owner. Kunlun Tech Co Ltd currently owns the gay dating app, which was valued at $155 million in 2016. The CFIUS did not give a public reason as to why it wants the app out of the hands of the Chinese. However, the committee is focused on maintaining national security, and the app is able to obtain a whole lot of data.

How a dating app that’s been at the forefront of meme culture for years now ended up tangled in the complicated mess that is the trade war is certainly baffling. The owners are complying with the CFIUS demands, though, and are already seeking a new buyer. The Kunlun Tech Co Ltd. purchased the remaining shares of the app in 2018. This purchase bought out the founder of the app, Joel Simkhai.

Concerns over national security have been raised because of the Chinese ownership of the app. According to current Chinese laws, if the government wanted to get its hands on of any data obtained by a Chinese company, they have the right to do so. Kunlun was in the process of creating an Initial Public Offering (IPO) later this year. However, in the wake of the demand, the group is looking to take the app to auction in order to get rid of it faster.

The Trade War

This isn’t the first company to be caught in the crossfire of the major trade war between the United States and China. Last year, the mobile phone retailer Huawei (which just launched a beautiful new phone) struggled to maintain a good image in America when its CFO, Meng Wanzhou, was arrested in Canada on suspected trade violations. The company, and Chinese Government, threatened major retaliation if she wasn’t released immediately.

China is focusing its efforts on becoming a major hub for both manufacturing and digital commerce by 2025. Grindr was a small part of that plan, and other companies are involved too. Chinese investors carry stakes in companies like Airbnb and Uber to name a few. Investments in American tech from the Chinese skyrocketed in 2015, and it was all part of a bigger plan.

On the surface, having such strong ties to China doesn’t seem like a big issue. The countries economy is booming, showing worldwide economic growth, and a tighter relationship with our financial overlords seems like it would be a good thing, right? Unfortunately, a heavy investment in technology means that sensitive data is at risk of being exposed to the Chinese Government. Not to mention, excessive worldwide growth at the hands of China may, in fact, hinder the global economy. Here’s a good video that explains how that works.

What’s Next For Grindr?

Kunlun has already begun to find a new owner for the app by soliciting potential investors that may be interested in taking it off of their hands. A controlling share in the hands of a new owner may mean changes for the app, but until a buyer is found it’s impossible to say what those changes may look like. The company has hired Cowen Inc. to handle the sale of the app. Cowen is seeking investments from potential American owners and current Grindr competitors.

Julia Sachs is a former Managing Editor at Grit Daily. She covers technology, social media and disinformation. She is based in Utah and before the pandemic she liked to travel.

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