Tencent invests $50M in 'Canadian WeChat'
China's Tencent has taken a $50 million stake in Kik Interactive, an investment that values the Canadian mobile messaging company at more than $1 billion, Kik said on Wednesday.
Kik, a Waterloo, Ontario-based company whose chat platform is popular with U.S. teens, has long said it aims to emulate the success of Tencent's WeChat, which has expanded from messaging to facilitating commerce in China.
The investment from Tencent, China's biggest social network and online entertainment company, helps justify that ambition, Kik Chief Executive Ted Livingston said in a phone interview.
"That company that everyone's talking about, they think Kik can do in the U.S. what they've done in China, that's why they're investing," he said.
Kik faces stiff competition in mobile chat, with Snapchat targeting the same teenage audience and Facebook's Messenger and WhatsApp products claiming far more users. But Livingston is betting on a growing number of add-on services to keep its 240 million users engaged.
"The more we connect not only people, but also connect services and business, the more they'll want to stay as they get older," he said.
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While not disclosing the size of the Tencent stake, Livingston said Kik is "part of the so-called unicorn club," a term describing private companies with valuations in excess of $1 billion.
Livingston declined to say when Kik might turn a profit. Last week it launched a trial product called Jam to connect users with their favorite musicians, and offers promoted chats that let advertisers engage directly with users who opt in.
Kik said it plans to use the series D funding - which brings total funding to $120.5 million - to hire staff in Waterloo and invest in other chat-based services.