BlueCity Holdings, the largest LGBTQ platform announced Wednesday it will acquire Finka, a leading gay social networking app in China targeting younger generations for 240 million yuan.

It's the second acquisition BlueCity has initiated since the company listed on Nasdaq in July. The transaction is subject to customary closing conditions that are expected by mid-December. The company also bought LESDO, a dating app focused on China's lesbian community, in August. BlueCity is the first business in the world built on the LGBTQ community that has gone public.

BlueCity is the first business in the world built on the LGBTQ community that has gone public. The company's IPO and further expansion is supported by the booming "pink economy". According to statistics provided by company Frost & Sullivan, the global LGBTQ population is expected to grow to 591 million by 2023, and the LGBTQ market is expected to reach $5.4 trillion by that time, as globally the LGBTQ community's disposable income is higher than heterosexuals'.

Read more: China's LGBTQ online platform BlueCity listed on Nasdaq, hopes to further raise awareness

Finka had over 2.7 million registered users in 2019, and is the top choice for young Chinese gay men to make friends, according to Frost & Sullivan. The majority of the app's users are born after 1995 and are from China's first-tier cities. The app allows users to establish social contact and share their daily life through features like matching, private message, posting moments and lifecasting.

BlueCity's gay dating app Blued, which is China's largest gay dating app now has 54 million registered users. Together with Finka, Blue City will connect 56.7 million LGBTQ users around the world. Before the acquisition, Blued was already the largest online LGBTQ community in China, India, South Korea, Thailand and Vietnam.

"We are excited about this strategic acquisition. Finka complements our Blued app, both in its functionality focused on dating and swipe, and in the demographics of its users," said Ma Baoli, BlueCity's founder and chief executive officer. A former policeman, Ma founded BlueCity back in 2000.

BlueCity offers a broader range of services for the gay community including online dating, professional health-related services and family planning consulting services, while Finka is focused mainly on relationships, according to Ma.

Ma said that BlueCity is building a portfolio of apps and services to better serve the LGBTQ communities across geographies and demographics, and the company will continue to improve and broaden its services through potential M&A opportunities.

Ma said that after the acquisition, Finka will continue to operate as a separate app backed by BlueCity both economically and operationally.

"Blued and Finka each has unique features and strengths for their respective communities. This acquisition integrates a menu of options and create synergies that can better meet the needs of a wider demographic," said Xiao Qiang, founder of Finka.

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.

On top of providing LGBTQ communities with opportunities for making friends, dating and expressing themselves through online platforms, BlueCity has also been working to raise awareness for HIV prevention. The company pledged to donate one million yuan this Tuesday to further carry out HIV-prevention education and control in the lead-up to World AIDS Day this year.

As an internet company, BlueCity has been combining online and offline tools for HIV prevention. HIV-prevention related content on Blued, the core app of BlueCity, had an accumulated audience of 325 million as of June 2020. On top of that, through cooperation with offline partners, BlueCity has amassed a network comprising nearly 7,000 testing locations across the country, which users can search for on Blued. Users can even make appointments directly with 224 testing centers in 32 Chinese cities, providing them with discrete, stress-free services.

A 2019 report from China's National Center for AIDS/STD Control and Prevention reported 16,000 newly discovered cases of HIV/AIDS in 2018 among young people aged 15-24. Among them, more than 3,000 cases were young students.