A display board showing Tencent Holdings Ltd's WeChat messaging and online payment services at an expo in Beijing. Its investment in the Canadian messaging firm Kik Interactive is part of efforts to tap the North American market.(Photo provided to China Daily)
Mobile messaging firm's chief says both have 'shared vision' Tencent Holdings Ltd has underlined its overseas ambitions with another substantial investment.
Canadian instant messaging service provider Kik Interactive said on Wednesday it had received a $50 million investment from the Chinese Internet company, which pushes Kik's value to more than $1 billion.
Ted Livingston, Kik's founder and chief executive officer, said the firm, whose chat platform is popular with teenagers, will use the cash to hire more people at its Waterloo, Ontario headquarters, and to develop a chat-based ecosystem.
Livingston wrote in an open letter on the blog-publishing platform Medium that Tencent had been at the top of his list of potential companies to partner with, as it "understood chat deeply" as the creator of QQ and WeChat, popular messaging services.
"When we met the Tencent team in China, it became clear that we had a shared vision.
"We agreed that someone could do in the West what WeChat was doing in China. We both believe it could be Kik."
Founded in 2009, Kik has more than 240 million registered users, mostly young people. It claims that around 40 percent of United States teenagers use the site, spending an average 35 minutes each visit - much longer than the average time spent on Facebook, it said.
Tencent refused to comment on the investment, but industry experts said it marked a significant step in its ambitious overseas expansion plan.
In 2011, the Chinese Internet firm founded a $760 million fund to invest in startups and hired James Mitchell from Goldman Sachs Group Inc as its new chief strategy officer with responsibility for outbound investment.
So far its foreign acquisitions have focused on games (around 70 percent), social networks and e-commerce.
It bought Riot Games in 2012, a US video game publisher renowned for League of Legends, for $1.67 billion and later that year spent $330 million for a 40 percent stake in Epic Games, another US video game development firm.
Twelve months later, it splashed out $1.4 billion for 6 percent of Activision Blizzard Inc, which now claims to have become the world's largest and most profitable Western interactive entertainment company.
On the social media front, Tencent bought 13.84 percent of Kakao Talk - a multi-platform texting app that allows iPhone, Android and BlackBerry users to send and receive messages for free - in 2012 for $215 million. Kakao Talk is similar to WeChat and especially popular in South Korea.
In 2013, it then invested in Snapchat, a video messaging app which is increasingly popular with US youngsters, for $200 million.
Despite Livingston's clear intent to expand Kik with the help of the WeChat creator, some industry analysts suggest that WeChat's own performance overseas has failed to live up to expectations.
Internet consultancy AppAnnie said in April that WhatsApp remains the world's most popular instant messaging service in 73 countries it polled.
Livingston ended his letter, "Today, there are only five other companies in the world that see the future like we do: Tencent, Line, Facebook, Snapchat and Telegram".
Pony Ma, Tencent's founder and CEO, admitted in March that WeChat's progress internationally has been slow, and that it even planned to cease overseas commercials for the site as "the effect is not very obvious".
Tencent's recent second-quarter fiscal results showed sales costs had been reduced by 19 percent as a result.
