Messaging Startup Kik Acquires Video Messaging Company Relay
Kik Interactive Inc, Canadian mobile instant messaging company said that it had raised C$38.3 million and brought Relay, the video messaging company as it aims to turn its youth-focused application into a broader platform for commerce.
Kik, which is based in Waterloo, said that said it raised the funds from investors led by Valiant Capital Partners. Kik did not provide details such as stake size that would indicate a rough valuation for the entire company.
The company has not revealed how much it has spent to acquire Relay. Relay specializes in short looping videos known as GIFs and could help the Waterloo-based company to strengthen its position as a leading messaging app for teenagers.
Kik sees its biggest rival as Snapchat. However it wants to emulate the success of WeChat in China. Ted Livingston, Chief Executive Officer and founder of Kik said that they are in a race against Snapchat to control messaging in the West.
Kik said it has over 185 million users, but, it did not reveal how many among those accounts are actively used. Snapchat is thought to have over 100 million users and Wechat has over 400 million.
Earlier this week, Snapchat teamed up with Square, an online payments company, to allow its users to send money to each other.
Livingston said that once they have customers, very much like Wechat, they can layer on more and more of these services so it basically becomes impossible to leave.
In August, Kik introduced promoted chats, by which a user can choose to engage directly with youth-focused advertiser like Vans, Vice and SkullCandy.
Currently, as a way to expand its messaging product, Kik is planning on adding animated GIFs to its offerings. On Dec. 15, Relay will be shut down and its capabilities will be integrated into Kik.