Kik’s attempt to become “the WeChat of the West” has been bolstered by a $50 million infusion from WeChat’s Chinese developer, Tencent.
Kik will use the funds to focus on the US teen market, a decision company President Josh Jacobs said came from observing Chinese-based WeChat’s accomplishments courting native smartphone users. He sees parallels with American teens, for whom smartphones are their first computers.
Because smartphones in China are the first and often only access to the Internet, messaging services like WeChat function as browsers and mobile operating systems.
Kik’s latest round, Jacobs said, “opens the door” to a cross-pollination with WeChat’s technology, which has been a market leader in everything from translation services, Internet of Things applications and micropayments.
Kik and Tencent hope the US populace will one day emulate on Kik the way the Chinese use WeChat. It has a young, adaptable user base –70% of its 240 million registered users are between 13 and 24 years old.
Kik is betting this year will be explosive for the messaging industry, and Jacobs said part of the decision for a strategic partnership was to “be one of the winners in the space” now that such intense competition has emerged. Beside Snapchat and Facebook’s two messaging services, WhatsApp and Messenger, there is also the American chat app Tango, which counts Alibaba as a lead investor.
Although Tencent has stakes in WeChat and Kik, Jacobs anticipates no friction. WeChat has more than 600 million active monthly users, with a total user base of more than a billion, and yet it very little penetration outside of China and Southeast Asia.
“What people are realizing is you tend to have really strong platforms in individual markets,” said Jacobs. The investment is one of many for Tencent, which has a stake in Kakao, the leading Korean chat app, and Snapchat.
“This is starting to heat up,” he said, “and become the next big platform race.”