BlueCity Holdings Limited, the owner of China’s biggest gay dating app Blued, is mulling a USD 50 million-initial public offering (IPO) in the US, in a bid to expand overseas and optimize services and products for the LGBTQ community, according to the prospectus filed to the U.S. Securities and Exchanges Commission (SEC) on June 16.
The company, which claims to have 49 million registered users in more than 210 countries and regions, will be traded on the Nasdaq board under the ticker “BLCT.” The price of the offering has yet to be finalized.
The predecessor of BlueCity is an LGBTQ online forum dubbed “Danlan,” which was founded in 2000 by Ma Baoli, a closeted policeman known on Danlan by the name Geng Le. Ma later quit his policeman job and established the company BlueCity in 2011 and launched the mobile app Blued in the year after. Ma is currently the chairman and CEO of the firm, with 39.6% shares. Other shareholders include Shunwei Ventures, CDH Investments Liberty Hero Limited and Crystal Stream. In previous rounds of financing, BlueCity secured over USD 130 million from investors.
Over the years, Blued, originally a location-based dating app, has grown to be a comprehensive platform for the community, with a livestreaming function, health services, a public interest arm for raising awareness of HIV, and parenthood consulting.
With 6 million monthly active users (MAUs), the company is yet to be profitable. According to the prospectus, BlueCity recorded net losses of RMB 52.9 million (USD 7.5 million) in 2019, down by 63% from the prior year.
Meanwhile, it generated total revenue of USD 107.2 million in 2019 with an annual increase of 51.4%, mainly from livestreaming services, membership subscriptions, advertising and other value-added services like healthcare and consulting. The company says 49% of its MAUs are from countries outside China, such as India, Korea, Thailand, and Vietnam.
Per stats from consulting firm Daxue, China’s LGBTQ community is the largest in the world in terms of population, reaching between 60 and 70 million people, therefore, the pink economy is rising. But stigma and misunderstandings are still rife in the society, where LGBTQ-related content is under censorship and same-sex marriage is not allowed by law in China.
In the list of risk factors, BlueCity points out that its business could be impacted by governments’ policies, especially in regions with anti-LGBTQ attitudes, which would probably cause a ban towards the app.
Another gay-dating app, Grinder, which was acquired by Chinese gaming company Kunlun in 2016, failed to go public since the US government raised concerns over its data and privacy protection. The Committee on Foreign Investment in the United States ordered Beijing-based Kunlun to sell its ownership last year, and the deal has been approved recently, The Wall Street Journal reported in May.