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The mobile messaging app is looking to expand beyond messaging to other functions, like commerce
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If you thought unicorn fever was coming to an end, I'm sorry to break it to you, but it's still out there. There have been18 new billion companies in the first half of this year, and 12 of those came in the second quarter alone, including Zenefits, Oscar Health Insurance and MarkLogic.
Now we have our newest one in mobile messaging app Kik, which announced on Tuesday that raised a new $50 million round, which valued the company at $1 billion.
The investment came from Chinese Internet giant Tencent, the company behind popular mobile messaging service WeChat.
Kik had previously raised $70.5 million in funding, including a $38.3 million round in November of last year. Previous investors include Valiant Capital Partners, Millennium Technology Value Partners, SV Angel, Foundation Capital, RRE Ventures, Spark Capital and Union Square Ventures. The company has now raised $120.5 million in total.
Founded in 2009, the Waterloo, Ontario-based Kik is a mobile chat app based on usernames that allows users to share content, talk to official accounts, and explore their interests. It also serves as a platform for such brands as MTV and Gramercy Pictures. It is also provides a developer platform, with open-sourced tools and libraries that allows them create web experiences that can be discovered and instantly shared by Kik's users.
In the press release, Kik made it clear that is seeks to emulate WeChat, a company that has gone beyond mobile messaging to "facilitate numerous other experiences, including booking taxis, shopping, ordering food deliveries, paying utility bills, playing games, and following celebrities, opinion leaders, and brands via 'Official Accounts.'"
The company currently has 240 million registered users, seventy percent of Kik’s 240 whom are between the ages of 13 and 24 years old. 50 percent of active Kik users share content each day and approximately 40 percent of U.S. teens use Kik.
This gives the company a unique opportunity to differentiate itself in a crowded market that also includes Facebook Messenger and WhatsApp.
“Young Americans are a large group with unmet needs. We can’t think of a better group to be building for,” Ted Livingston, founder and CEO of Kik, said in a statement.
“Consumers and developers alike are suffering from app overload, and we are increasingly seeing the potential for services to be delivered in better, lighter-weight ways through chat, especially with bots. Companies like Slack, Telegram, and Facebook are also starting to realize this.”
Kik says that it plans to use the funding to grow its team in Waterloo and to invest in chat-based services. The company also has offices in New York, Los Angeles, and San Francisco.
"We have 100 employees and are looking to double in size in 12 months," a Kik spokesperson told VatorNews.
"We will be investing in building, and supporting the building of, services that improve the chat experience for US teens. That could be anything from music communities to food ordering. However, it is still early days. We are just getting started on services."
Kik rolled out its first service, called Jam, which is a music based community, last week.
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