Kik Messenger Takes $38 Million in Funding, Buys GIF Startup Relay

Messaging app Kik has raised $38.3 million in new funding and acquired Relay, a messaging network focused on sending and receiving GIFs.

The round was led by Valiant Capital Partners, and included new investors Millennium Technology, Value Partners and SV Angel. Existing investors Foundation Capital, RRE Ventures, Spark Capital and Union Square Ventures were also in on the round, bringing Kik’s total funding to just north of $70 million since its 2009 launch, according to co-founder and CTO Chris Best.

The startup bought Relay in a combination of cash and stock, according to Relay co-founder Jon McGee, although neither company offered financial details.

Kik is working to solidify itself in one of tech’s most highly competitive spaces: Mobile messaging. There are a number of major messaging services vying for user attention in different corners of the world. China’s WeChat has nearly 470 million users, while Facebook’s Messenger has 500 million, and WhatsApp 600 million.

While Kik may be substantially smaller — 185 million users with another 250,000 added each day — its strength appears to be the intensity of its user base: Millions of teenagers. Best says that 40 percent of the 13- to 25-year-olds in the U.S. are using the service.

Kik plans to use the money to focus on hiring, hoping to double its workforce in the next year. It’s also dipping its toes into revenue-generating projects, including promoted chats that allow brands to send content like videos or promotions to users via the app. “We’re not WhatsApp, we’re not looking to never make money and get bought,” Best said. “We want to find a play here.”

As part of the Relay acquisition, Kik will soon roll out a native tool for sharing GIFs on the the service, and McGee and fellow co-founder Joe Rideout will join Kik’s chat product team.

But expanding with messaging-specific tools is just part of Kik’s ultimate plan, according to Best. Kik sees a model in how Chinese messaging app WeChat has evolved into an all-encompassing utility tool — you can even book flights through the messaging service — and Kik wants to evolve beyond messaging as well.

“[We want to] explore that same opportunity to see what we can build messaging into,” Best said.

This article originally appeared on Recode.net.

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