Blue City Holdings Ltd., the company behind China’s gay dating app Blued, filed its application on Tuesday to offer shares on the Nasdaq exchange.

Why it matters: Blued, which boasts 49 million users, is the largest social dating app for China’s LGBTQ (lesbian, gay, bisexual, transgender, and queer) community, according to a report by consultancy Frost & Sullivan.

  • The company’s application to list on a US exchange bucks the current trend of Chinese tech companies showing increased interest in Hong Kong listings.
  • US government agencies are pushing for more stringent rules on foreign companies including those from China, following a string of accounting scandals led by Luckin.
  • Still, a listing in the US may garner more interest than one on its home turf, which holds less progressive views on LGBTQ communities.
  • Blued’s global expansion may challenge US counterparts Grindr and Hornet.

Details: The company used a placeholder amount of $50 million as a fundraising target, according to the filing. A September Bloomberg report cited a source that said the IPO was expected to raise around $200 million at a $1 billion valuation.

  • China, where the LGBTQ population is still a controversial and highly regulated group, remains the Beijing-based company’s primary market.
  • But the app is also building a global presence with nearly half of the company’s 6 million monthly active users from outside of China including India, South Korea, and Thailand as of March 2020, the company said.
  • Blued is still loss-making, but its net loss attributable to shareholders has narrowed to RMB 27.9 million ($3.9 million) in Q1 2020 from 195.9 million from the same period a year earlier, according to the filing.
  • Besides its core dating feature, the app also runs livestream content and surrogacy matchmaking service Bluedbaby, as well as healthcare service He Health.
  • Livestreaming is the company’s primary revenue source, generating RMB 670 million or 88.5% of the company’s revenue in 2019. The company earns its remaining portion of its revenue from membership services, advertising, and others.
  • The founding team holds 37% of the company through Blue City Media. Shunwei Ventures, the venture capital firm started by Xiaomi founder Lei Jun, owns 12.3% of the firm, and is the largest institutional investor. Other shareholders include CDH entities, Liberty Hero, and Crystal Stream Fund.
  • AMTD Global, CLSA Limited, Loop Capital Markets, and Tiger Brokers are joint bookrunners on the deal.

Context: Launched in 2012, Blued has received a total of RMB 130 million of venture capital in seven financing rounds.

  • Beijing Kunlun Tech, the Chinese owner of Grindr, in March sold 99% of its stake in the US gay dating app, a year after US regulators pressed for disposal over national security concerns.

Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.