HONG KONG -- Beijing Kunlun Tech Co struck a deal on Monday for a controlling stake in Grindr, the world's largest gay social networking app.
The deal to buy a 60% stake for $93 million marks Kunlun's latest move in a series of acquisitions since last year. Those acquisitions include a 20% stake in British mortgage lender LendInvest and a 20% stake in Qufenqi, a Chinese micro-loans platform, through its Hong Kong-based subsidiary Koram Games.
In California-based Grindr, Kunlun sees the vast potential of advertising revenue plus a growing membership.
Grindr has over two million daily active users in 196 countries as of June 2015. More than 30% of its active users are in the U.S., where the company has the strongest presence, followed by Britain and Mexico.
Grindr said that each user spends 54 minutes per day on its app. Comparatively, Facebook said each of its users spends about 20-plus minutes on its app each day.
Although homosexuality is still a contentious subject in China, social media platforms targeting the community have increased in recent years.
Blued, Grindr's equivalent in China, is reported to have more than 3 million daily active users since it started running in 2012. Its founder Ma Baoli is mulling an initial public offering of the company, according to a report by the Wall Street Journal.
A survey by China Luxury Advisors last year showed that about 5% of the population, or 70 million people, in China are lesbian, gay, bisexual and transgender. That is comparable to the entire population of the U.K., or the population of Beijing, Shanghai, Guangzhou and Shenzhen combined.
Asset management company LGBT Capital estimates that China's "Pink Economy" is worth approximately $300 billion.
Kunlun, listed on the Shenzhen Stock Exchange since last year, saw its shares surge to the maximum daily limit of 10% on Tuesday after the announcement of the deal.
The company, also known as Kalends, set out as an online games developer in 2008, and went on to build the world's second largest online software downloading platform Brothersoft.com.
The deal with Grindr will be settled in cash and will be the first time that the American company seeks external financing since its establishment in 2009.
"For nearly seven years, Grindr has self-funded its growth," Joel Simkhai, founder and CEO of Grindr blogged. "It will generally be business as usual for us here at Grindr, but with a renewed sense of purpose and additional resources to deliver a great product."
Uber, Airbnb, Groupon, and Dollar Shave Club all advertise on Grindr.