Chinese company Tencent has plunged deeper into the U.S. market with a multi-million dollar investment in Canadian online messenger Kik.
Already one of the largest internet companies in the world, Tencent is aggressively looking to grow its foot print across North America, and outside its stronghold of China.
Shenzhen, China, based Tencent invested $50 million in Kik and now gains access as not only a partner but also a part owner of the North American company. Tencent will have a strong operational role in the company going forward.
Kik is a messenger service that boasts over 240 million users. It is especially popular among teenagers in both the U.S and Canada. According to the company, two out of every five teenagers now use the app. The investment by Tencent values the company at $1 billion.
Tencent is the biggest messaging company in China thanks to its two popular apps WeChat and QQ.
But the company has clear aspiration of global messaging domination after it invested millions of dollars recently in Snapcat. Snapchat enjoys over 100 million daily active users, most of whom are from North America.
Tencent has also diversified beyond messaging. It has announced plans to develop an online stock trading platform, has committed to enhancing its online to offline strategic partnerships and will be escalating its shareholding of eLong, one of China’s growing online travel services providers.
Executives from Tencent have said the Kik investment will help the company develop an ecosystem of multiple services that would help it fight rival messaging services Whatsapp, Facebook and SnapChat.
Whatsapp boasts an impressive 800 million registered users while Snapchat has over 700 million.
Kik recently integrated games and other apps such as Soundcloud for music streaming into its services to help it carve out a unique niche from its rivals. This same approach is used by WeChat and other Asian messaging apps which eschew the simple focus on North American rivals.
Kik doesn’t require its users to have a mobile number, a feature that makes it very attractive to teens. Tencent is looking to capitalize on this young user base to create a generation of users that grow up on its messaging platforms.