Chinese gay flirting app Blued valued at US$300m
Staff Reporter
2014-11-17
A screenshot of the Blued website homepage. (Internet photo)
Blued founder Geng Le speaks at the one-year anniversary of Chinese recruitment website Lagou in Beijing on July 20. (Photo/CFP)
Chinese gay flirting app Blued is now valued at an estimated US$300 million despite having not made a single dollar of profit, reports Shanghai-based outlet the Paper.
Blued, launched in 2012 by former police officer Geng Le, recently announced the completion of its B series round of financing valued at US$30 million from American venture capital firm DCM. The company's A series round was completed last December courtesy of Chinese venture capitalist Crystal Stream, following a 3-million-yuan (US$490,000) infusion in March 2013 from the Shanghai-based angel investor Zhonglu Group.
Though Blued currently does not have any money-making mechanisms, the company's value has already been pegged at around US$300 million given the rapid growth of China's LGBT community and the fact that 20% of the app's 15 million accounts belong to overseas users.
Geng said he did not intend to make money with the app in the beginning and had only wanted to tell homosexuals in China that they are not perverts or abominations. Geng was responsible for setting up China's first gay website Danlan — meaning "light blue" in Chinese — in November 2000, which he sustained with his own money and donations until 2007, when the website finally began to make a profit through advertising and cooperation deals.
Even when Geng moved to Beijing in 2009, his company only had 10 people, with each of them only making 2,500-3,000 yuan (US$405-$490) a month, though the entrepreneur said they didn't care because they were like "a big family."
For Geng, the turning point was when he met with then-Chinese vice premier Li Keqiang in 2012 after receiving an invite from China's National Health and Family Planning Commission. The meeting is believed to have gone a long way in alleviating the concerns of investors in putting their money into a legally cloudy enterprise.
Blued came at a time when there were no location-based dating apps available on the Chinese market and gained a million users in its first six months. Geng said he was never concerned about the number of users the app would attract, only whether he had the technology to support the rapid growth. Geng also claims that the average Blued user opens the app more than 20 times a day, significantly higher than most other apps. He added that the company has been poaching top-quality developers to work on version 4.0 of the app, which he expects to be released no later than early 2016.
Though Blued has not made any money yet, that will soon change after the the latest round of financing, with the company set to announce new value-added member services and cooperation deals with e-commerce and online gaming businesses.
The growing investment potential of China's 70-million-strong out LGBT community and the increasing acceptance of homosexuality in the country is attracting more and more businesses to this sector. According to gay and lesbian market research firm Community Marketing every dollar invested in the LGBT community receives a 180-fold return. The consumption power of the LGBT community is also estimated to be five times that of the straight community.
Geng says he plans for Danlan to continue reducing its advertisements and to eventually turn into a charitable organization supporting China's LGBT community. In return, however, he hopes that Blued will continue to grow with the support of the Chinese government, and that his ultimate goal is for the company to one day list on the Nasdaq.
