WEST HOLLYWOOD, CA—As LGBTQ friendly companies go, it is difficult to imagine one that embodies elements of an all-inclusive and exciting business model more than Grindr LLC. The ten-year-old dating app is currently celebrating its tin anniversary in the iconic Red Glass Building at the Pacific Design Center in West Hollywood. The company serves a daily catered lunch, the dress is Casual Friday—every day, and full-time benefits include health, dental, and vision coverage across all family structures. The company organizes pool parties and costume day, has panoramic views to die for out of its red-glass-skinned twin towers, free parking for one an all, and it’s Grindr, for crying out loud, the world’s largest LGBTQ dating app.
So how could President Donald Trump and his newest play for world attention—placing tariffs on Chinese imports—possibly affect this company paradise? Well, Grindr first came to the attention of Washington, not through Trump or his White House Administration, or even the Republican Congress for that matter. It all started with a letter from two Democratic Senators, Edward Markey from Massachusetts and Richard Blumenthal from Connecticut, who are members of the Committee on Commerce, Science and Transportation. The Senators sent a request to Grindr LLC in April of last year, inquiring how the dating app intended to protect the privacy of its users.
The fact that the Chinese owned Grindr came as a surprise to many in Washington last year when they found that in January 2016, Israeli-born founder Joel Simkhai had sold 60% of the dating app and his company to Beijing-based Beijing Kunlun Tech for $93 million–this all done without the knowledge of the Committee on Foreign Investment in the United States (CFIUS), a U.S. government agency which assesses the national security risk of foreign investments.
Simkhal, who emigrated to this country at age three with this family, went through the complicated process of coming out to his family when the dating app became a success, and at the time of the partial sale downplayed the deal.
“[The sale is] a huge vote of confidence in our vision to connect gay men to even more of the world around them,” Simkhai said while stressing that it would “business as usual” at the company, with Simkhai and Grindr’s employees retaining the remainder of the privately held stock.
“We have taken this investment in our company to accelerate our growth, to allow us to expand our services for you, and to continue to ensure that we make Grindr the number one app and brand for our millions of users,” Simkhai posted to the company blog.
Two years later, in January 1918, Kunlun purchased the remainder of the company for $152 million, making Grindr employees wealthy and the now ex-CEO Joel Kimkhai very wealthy.
It was only then that the Trump administration and CFIUS became aware that Grindr’s 27 million users around the world might present have their data exposed to examination, or even blackmail.
Last March, as part of the Trump administration’s tariff meltdown over the Chinese trade imbalance, the president instructed CFIUS to “strongly urge” Beijing Kunlun Tech to sell the company back to the U.S. The timing became more urgent when Zhou decided to offer an overseas IPO for the company, making control of the online data even more difficult.
On May 9, Kunlun Tech signed an agreement with U.S. authorities agreeing to the sale. As part of the deal, Kunlun Tech cannot access an unknown amount of Grindr user information as well as transferring any “sensitive data” such as HIV status to entities within China. Grindr is also required to stop all operations in China and must get CFIUS approval for three of its board members. Also, one board member must be an American citizen with U.S. security clearance.
As of now, the entire Grindr business is up for sale—price unknown. Just how much of its data has already been mined by the ever-busy Chinese hacking industry remains to be seen. One thing is for sure, the original 60% sale of the business was a significant gaffe by the Obama administration who apparently was not aware that the majority ownership transfer took place.