Internet holding company MediaLab has paid an undisclosed amount to acquire the instant messaging app developed by US-based Kik Interactive, which counts internet group Tencent as an investor.
Kik Interactive was founded in 2009 and launched eponymous messaging app Kik Messenger the following year. It went on to amass 300 million users at the peak of the service’s popularity in 2016.
The MediaLab deal comes as Kik is fighting a lawsuit from US regulator Securities and Exchange Commission, which is seeking to reclassify the $98m initial coin offering for its Kin crypto token as a regulated security.
Costs from the legal wrangle had led Kik to close the Kik Messenger last month and dismiss 70 workers at the Israel-based division tasked with Kin’s development.
MediaLab now hopes to make the app more functionally reliable by discontinuing buggier features while inviting user feedback to introduce new ones. It plans to generate revenue from the app by bringing in advertising and may collaborate with Kik to integrate support for the Kin token.
Kik has disclosed a total of $116m of funding, including $50m raised from Tencent at a $1bn valuation in 2015.
Valiant Capital Partners had led a $38.3m series C round in 2014 featuring Millennium Technology Value Partners, SV Angel and existing backers Foundation Capital, RRE Ventures, Spark Capital and Union Square Ventures. Kik’s early investors include Golden Triangle Angel Network.