Kik Messenger Saved From the Verge of Shutdown

Canadian social media and messaging app Kik revealed it’s “here to stay.” This was an apparent reversal from what the company's CEO, Ted Livingston, said in a blog post — that it was considering shutting down.

Kik Messenger Saved From the Verge of Shutdown
Kik Messenger Saved From the Verge of Shutdown

Canadian social media and messaging app Kik revealed it’s “here to stay.” This was an apparent reversal from what the company's CEO, Ted Livingston, said in a blog post — that it was considering shutting down.

It became clear just five days later why it was “here to stay.” A Santa Monica-based holding company, MediaLab, had signed an agreement with Kik Interactive to buy its Kik messaging platform.

Back in 2009, a group of students from the University of Waterloo in Canada came together to create new technologies for use on smartphones. In October 2010, Kik Interactive was launched, reaching a million users in under 15 days. The company demonstrated that Twitter could be a powerful tool to run a marketing campaign, as the social media was the chief catalyst.

While developing the project, the students had received $4.7 million in angel investment. In just over a year, on March 7, 2011, the company raised $8 million in a Series A investment round. The expansion efforts continued, and in April 2013, the company managed to raise another $19.5 million in Series B funding, with Foundation Capital being the lead investor.

The messenger started to gain global traction, and the need for rapid expansion continued. It raised $38.3 million in a Series C round of funding. Kik got a major break in fundraising in August 2015, when it received a $50 million investment from Chinese internet giant Tencent, the parent company of Chinese messaging service WeChat. With this investment, the company gained the prestigious “unicorn” status.

However, in 2017, Kik decided to not go through the traditional route of raising funds through venture capitalists, instead opting for an in-trend option, an initial coin offering (ICO). The company managed to raise $100 million from more than 10,000 participants in 117 countries. Alina Kiselevich, a communication analyst at Enigma Securities, told Cointelegraph:

“Looking back at the crypto-world of 2017 it is impossible to say that Kik’s move wasn’t a shot worth taking, considering the financial weather for the company back then and the ‘challenges’ in late 2016 and early 2017, prior to the ICO. Only the future resolution with SEC will show the real definition of the current situation, helping the community understand if Kik had to stick to the traditional VCs in case it would turn out to be a disaster or if it was a well-thought out plan.”