Kik has ambitions to become the WeChat of the West, following news that the Waterloo-based company has raised a $38.3-million Series C investment round.
Using the Asian market as a model, the mobile instant messaging app plans to offer a well-rounded lineup of in-chat products and services.
“In China, WeChat users can watch videos, call a taxi and even apply for a mortgage without leaving the app,” Heather Galt, Kik’s VP of Marketing, told Communitech News.
As similar trends begin to emerge here, Kik is looking to the competition of its competition as it goes up against those who dominate the North American market.
“WeChat is already bigger in China than Facebook is for the U.S.,” Galt said.
With this larger platform concept as a vision, Kik will direct the funds into product and business development, and growing its engineering team.
That plan is already in motion with Kik’s acquisition of Relay, a Toronto-based startup that has built a GIF messaging service, which was announced Wednesday along with the funding round. It could be the first of further acquisitions.
“We’re open to bringing on new expertise and technologies if they’re a good fit with the company, our vision and our culture,” Galt said.
Building a solid revenue model will help Kik, which has now raised more than $70 million, to compete in what it considers “the most important race of this generation,” Galt said.
“Mark Zuckerberg said the other day that 95 per cent of the world are on some form of messaging, and we agree,” she said.
Similar to the space race, big numbers are being thrown down, like Facebook’s $17-billion purchase of WhatsApp.
In August, the company introduced Kik Promoted Chats, which gives brands access to Kik’s more than 185 million users through one-to-one engagement. This is just one of several monetizing strategies that the company plans to release in the next 12 months.
Kik is the latest Waterloo Region tech company to raise a significant round in recent months, with D2L raising $85 million in August and eSentire raising $14 million in September.
For Kik, which employs 60, the plan is to grow locally.
“As we continue to grow, we will focus most of our hiring in Waterloo and the surrounding area,” Galt said, adding that some U.S.-based roles may open up for business development.
For Kik’s founding members, recognizing all the employees who have helped get the company to this point was important during this funding round.
“Past and present employees, even previous interns who no longer work at the company and did not have equity, shared in the secondary [offering],” Galt said.
In similar fashion, Kik acknowledges the community where it all began for them.
“Being in Waterloo Region has been key to our success so far, and we remain committed to being here for the long term,” she said. “It’s a community that is very supportive of both entrepreneurs and young and exciting companies, and we have access to some of the best engineering talent in the world through the University of Waterloo.”
