Chinese-Owned Dating App Plans To Raise $85 million In US IPO

Blued, which claims to be the world’s largest gay social network app, has announced plans for a US Initial Public Offering (IPO).

Last week, China-based BlueCity Holdings in its filings with the Securities and Exchange Commission revealed that it plans to raise around $85 million in an IPO of American Depositary Shares (ADS).

The IPO scheduled to hit the market on Wednesday July 8 is planning to sell 5.3 million ADS at a price of $15-$17 per ADS.

With over 49 million registered users, as of March 2020, the scale of Blued’s ambitions are matched only by its meteoric rise over the past decade. For comparison, Grindr has over 27 million users and Tinder around 57 million users around the world.

 In 2000, founder Baoli Ma, a closeted policeman, under the alias ‘Geng Le’ founded one of China’s oldest LGBTQI forums called Danlan.org – the predecessor to Blued. This was a year before China removed homosexuality from its official list of mental illnesses. In 2011, Ma resigned from the police force and launched the Blued app.

On average over six million users log into the app every month. Its revenue in 2019 was US$107.2 million. Most of its revenue comes from live streaming services (US$94.8 million), followed by membership services (US$5.2 million) with 457,000 paying members. Advertising brings in  (US$5.0 million) and it earns US$2.2 million from other services like assisted reproduction and health services.

“We are the dominant leader in China,” the company said in its filings. “Leveraging our experience in China, we have successfully expanded into a number of overseas markets and established a strong global presence. We are the largest online LGBTQI community in India, Korea, Thailand and Vietnam in terms of average monthly average users in 2019, according to the Frost & Sullivan Report. We are rapidly expanding into new markets, and have users spanning over 210 countries and regions as of March 31, 2020.”

Though just over half of its monthly average users are from outside China, more than 90% of its revenues currently are from the country. The prospects of pink money and the large LGBTQI market is what Blued seems to be offering its investors.

 “The market size of the global online LGBTQI market was US$261.5 billion in 2018, and is expected to reach US$580.4 billion by 2023, representing a CAGR of 17.3%,” Blued said. It estimates the population of those who identify as LGBTQI as 450 million in 2018 and likely to grow to 591 million by 2023. According to the Frost & Sullivan report “the LGBTQI population in general has higher average disposable income than that of the general population. The LGBTQI population also tends to spend more across various categories, such as healthcare, recreation, clothing and footwear, and dining out, compared to the general population.”

Blued said it was planning to use the IPO proceeds for geographic expansion, investment in technology and development, artificial intelligence technology and big data capacity.

This is not the first time a gay dating app has tried to rase money through an IPO. Grindr, founded in 2009 in the US, had unveiled plans to list on the international stock exchanges in 2018. This was however halted after the Committee on Foreign Investment in the United States (CFIUS) raised objections over the apps Chinese ownership. Chinese gaming company Beijing Kunlun Tech Co Ltd had purchased Grindr between 2016 and 2018.

Following the objections, Kunlun in March 2020 announced that it was selling its 98.59% stake  to US-based San Vicente Acquisition for $608.5 million.