On Tuesday, the Chinese Internet Giant Tencent has invested $50 million in a Canadian chat app Kik, which is known as the ‘WeChat of the West.’ This new investment has increased the value of the Canadian startup to more than $1 billion making it join the Unicorn club.
The Chinese firm Tencent targets on the internet products that includes online sales, social networks and also runs the famous Chinese messenger service WeChat. The company believes that investing in Kik could build its own success in developing chat apps into a platform that brings in almost everything from e-commerce to banking.
Launched in 2009, Ontario-based messaging company Kik expects the investment will help it boost its standing in the global market among its other competitors like Whatsapp, Snapchat or Facebook Messenger app. Apart from messaging, it also allows to integrate options like shopping, ordering taxis and playing games. The company which has been quite famous among the teenage crowd had been looking for a strategic partner for quite a while and its finally found it.
The company claims that among its 240 million users 70% of users age range between 13 and 24 years and around 40% of the USA teenagers have Kik app on their smartphone. “Young Americans are a large group with unmet needs. We can’t think of a better group to be building for,” said Ted Livingston, founder and CEO of Kik. Regarding the investment he said, “When we met the Tencent team in China, it became clear that we had a shared vision. We agreed that someone would do in the West what WeChat was doing in China. The only question was who. We both believe it could be Kik. They think Kik can do in the U.S what they have done in China, that’s why they are investing.”
Kik with the fresh funds raised through the series D funding, plans to bring in more human resources in Waterloo and also invest in various other chat-based services for the young.
Livingston stated that the company has still not made profits but is working towards it. Last week the company launched a trial product called Jam to connect users with their favorite bands and musicians, and offers promoted chats that permits advertisers to communicate directly with users who pick it.