TORONTO (Reuters) - Canadian mobile instant messaging company Kik Interactive Inc said on Wednesday it had raised C$38.3 million and acquired video messaging company Relay as it aims to turn its youth-focused application into a broader platform for commerce.
The Waterloo-based company said it raised the funds from investors led by Valiant Capital Partners. The company did not provide details such as stake size that would indicate a rough valuation for the entire company.
It also did not disclose how much the company spent to purchase Relay, which specializes in short looping videos known as GIFs and could help Kik cement its position as a leading messaging app for teenagers.
Kik, which only started bringing in revenue via sponsored chats in recent months, sees its biggest rival as Snapchat, but wants to emulate the success of Tencent's (0700.HK) Wechat in China, which has expanded from messaging to facilitating loans and other business.
"We're in a race against Snapchat to control messenging in the West," Kik founder and Chief Executive Officer Ted Livingston said in a phone interview on Wednesday.
Kik said it has more than 185 million users, but did not disclose how many of those accounts are actively used. Snapchat is thought to have more than 100 million, and Wechat boasts over 400 million.
Snapchat earlier this week teamed up with online payments company Square to allow users to send money to each other. [ID:nL2N0T72FI]
"Once we have you, very much like Wechat, we can layer on more and more of these services so it basically becomes impossible to leave," Livingston said.
Kik in August introduced promoted chats, by which a user can opt in to engage directly with youth-focused advertisers such as Vice, SkullCandy and Vans.
It says over 6.5 million users have opted-in to chat with one of its partners.
Reporting by Alastair Sharp; Editing by Alan Crosby