BlueCity launches it IPO on the NASDAQ on Wednesday. Photo: Courtesy of BlueCity

BlueCity BLCT.O, the owner of China's biggest gay men dating app Blued, said on Wednesday it had bought a Chinese lesbian dating app LESDO, marking the first ever deal within the country's LGBT market.

Launched in 2014, LESDO is an app for lesbian users to socialize and secure dates. It is believed to be the second most popular lesbian social app in China based on Reuters' interviews among customers after another app, Rela.

BlueCity raised $84.8 million in a Nasdaq initial public offering in July that valued it at $614 million and told Reuters at the time that it would focus on expanding in Asia and diversifying its portfolio.

"We can see the scale of existing lesbian apps are not big enough to meet the demand of a sizable market," BlueCity's founder and chief executive Ma Baoli said in an interview with Reuters on Tuesday. The company declined to disclose financial details of the deal.

Ma said one of his main focuses with the acquisition would be to win back customers who had left LESDO for other lesbian apps, adding that BlueCity would offer marketing guidance, financing, and algorithm support to boost LESDO's performance and image.

China doesn't officially recognise same-sex relationships, nor explicitly ban them, though in practice LGBT content is sometimes considered sensitive and blocked by censors. Rela was briefly taken offline in 2017 for unclear reasons.

BlueCity has maintained a benign dynamic with China's regulators. In 2012, Ma had face-to-face discussions with now Premier Li Keqiang for Blued's contribution in combating the spread of HIV in the mainland.

"We will make sure LESDO's content can comply with authorities' regulations." Ma said.

Reuters