Chinese internet giant Tencent, the maker of WeChat and QQ, has invested $50 million in Canadian messaging app Kik for an undisclosed amount of stake at a valuation north of $1 billion USD. The investment is part of the company’s D series funding which totaled $120.5 USD million.
Kik’s CEO, Ted Livingston, mentioned in a public letter that the company has been seeking strategic partner for some time. Impressed by what Tencent has been able to do in China with mobile messaging and other services like shopping, music and games, the Kik team expects the new investment will be able boost its competitiveness and emulate WeChat’s success in North America.
Kik is experimenting with a WeChat-like model by launching a trial product Jam to connect fans of top artists.
Targeting a teenage audience, the app claims to have 240 million registered users with 70% percent of them between 13 and 24 years old. They say that 40% of American teenagers are active on Kik.
Ted has said that Kik won’t be targeting China anytime soon, but plans to recruit more employees with the funding.
As the most popular messaging app in China, Tencent’s WeChat announced 600 million monthly active user milestone this month. However, WeChat has been facing a bumpy road in their globalization initiatives and users based on the Chinese mainland still account for a vast majority of its numbers. In March this year, Tencent decided to reduce overseas promotion activities as user growth plateaus.
It now appears the company is taking a more subtle tact, tapping overseas users by investing in local players that have already have a footing in the market. As a part of Tencent’s global expansion plan, the company has acquired a 13.54% stake in Korean mobile messaging app Kakao Talk worth $63.7 million USD, along with acquiring stakes in SnapChat.
Image Credit: Kik