Messaging app for teens now worth $1 billion
NEW YORK – If messaging apps are the future, Kik is positioning itself to take over.
According to a new report from Pew Research Center, 36 percent of smartphone users use messaging apps such as Kik, WhatsApp or iMessage. Among the younger set, they’re even more popular as 49 percent of smartphone users ages 18 to 29 use these types of apps.
According to Kik Interactive, its app has a significant share of these users. The startup says it has 240 million registered users, the vast majority of whom are in the U.S. and between the ages of 13 and 24.
Kik banked $50 million in funding this week, making it the newest “unicorn,” a term for privately-held companies valued at $1 billion or more.
The financing comes from Chinese tech company Tencent, the developer behind WeChat, the Chinese-messaging platform with 600 million monthly active users. It’s the firm’s first investment in Kik.
Like WeChat, Kik sees itself as more than just a communications platform. WeChat users can also do things like shop, book taxis, order food, pay bills, play games and follow celebrities. Kik eventually wants to integrate services like these into its platform, as well.
“The chat app became a magic wand that empowered you to seamlessly interact with the world around you. That has always been our vision,” said Kik founder Ted Livingston in a Medium post Tuesday, announcing the funding. “But, Tencent had already made it real.”
Kik Interactive, headquartered in Waterloo, Canada, will use the financing to grow its user base, diversify its services and double its employees – currently at 100.
It’s not the only company that sees chat as the future of online services. Japanese-based Line, Snapchat, Facebook, which acquired WhatsApp for $22 billion, and Telegram are all making similar moves.
“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,” Livingston said. “The only question was who. We both believe it could be Kik.”
Kik Interactive President Josh Jacobs told CNNMoney chat has the potential to eclipse social networking platforms.
“As big as social networking is and as much as it’s dominated business press in the past five to six years, messaging is bigger,” Jacobs said. “We’re heading into the era where chat is going to be one of the dominant areas of innovation and development.”