Kik has raised a $19.5M Series B funding round, the company revealed today, led by Foundation Capital and including RRE Ventures, Spark Capital and Union Square Ventures. The Waterloo-based messaging app company will be using the funding to help continue to support its growth, and the new injection of cash comes at a crucial point for the company as it sets its sights on broader platform ambitions with the recently introduced Cards feature.
I spoke with Kik CEO Ted Livingston about the funding, and asked him specifically about what he thought of WhatsApp’s announcement from last week that it was now larger than Twitter in terms of active monthly users. Kik, which recently crossed the 50 million user milestone and is adding on new ones at a rate of about 200,000 per day, is far behind WhatsApp in terms of its user base, but Livingston said Kik is much more focused on the long-term goal of what comes next for a messaging app than its most direct competitor.
“There are two sides to it. On one side, they’re massive, they’re killing it, no question they’re bigger than Twitter. There never was a question in my mind that they’re bigger than Twitter,” he said. “But when asked about being a platform, [CEO Jan Koum] just completely dismissed it. He said it wouldn’t be good for WhatsApp’s users, and that the company wants to focus, but also knowing that Kakao has had incredible success doing just that.”
The take on the messaging space that WhatsApp seems to be taking is a little reminiscent of when BlackBerry essentially ignored the iPhone and the launch of the App Store, Livingston says. Kik, by contrast, seems to be making a larger bet that a model based around turning a messaging app into something more, with the inclusion of its Cards (HTML5 apps within an app which will soon be opened to outside developers), will ultimately lead to a richer experience that results in more lasting long-term growth.
Kik’s choice of investment partners this time around also reflects its larger goals around building a platform and using that to explore monetization options. Foundation Partners, a new investor for Kik, was chosen precisely based on its strength in those areas, Livingston tells me.
“What’s great about Foundation is that obviously it’s a great firm, and a lot of those involved have been entrepreneurs, and they’ve done like Chegg, Netflix and Pocket,” he said. “But Anamitra [Banerji] who handled this investment and just became a partner, was employee number 30 at Twitter, first product manager and created and drove all their monetization. So he’s basically the perfect guy for what we want to do.”
Kik is a growing player in a rich and diverse field, but like WhatsApp and others, the time has come for these companies to emerge and prove they have monetization plans that work, if they aren’t looking for an easy exit. This funding will help as Kik begins to mature its own platform goals, which so far seem to be catching on with its existing users.