what-happened-to-kik

What happened to Kik?

  • Kik Messenger, more affectionately known as Kik, is an instant messaging app that was developed by Canadian students at the University of Waterloo.
  • Kik ultimately failed because it could not properly monetize the user base which mostly consisted of children and teenagers. An effort to raise money via an IOC attracted the attention of the SEC which precipitated a lengthy and costly court battle.
  • Kik was acquired by holding the company MediaLab in 2019, leaving co-founder Ted Livingston to focus on his other ventures. MediaLab invested little in innovative features and today, Telegram and WhatsApp are far more popular.

History of Kik Messenger

Kik Messenger, more affectionately known as Kik, is an instant messaging app that was developed by Canadian students at the University of Waterloo.

Kik was launched on October 19, 2010, and reached 1 million users 15 days later.

The app then reached 200 million users in early 2015 with the company earning a billion-dollar valuation a few months later.

Despite hundreds of millions of users and several successful rounds of investment funding, co-founder Ted Livingston announced in 2019 that Kik would be shut down.

The decision was ultimately reversed, but a holding company acquired Kik and, in the past few years, has faded into relative obscurity.

The story of Kik and its various missteps is told in the following sections.

Anonymity issues

While enormously popular, Kik has endured multiple controversies since it was launched because of its anonymity features.

Users could easily sign up without providing their phone numbers, which made Kik unique among its peers.

As a result, the app became a haven for users with nefarious intentions, with a 2018 BBC report claiming Kik had been involved in over 1,100 child abuse cases.

To make matters worse, the company was known for not cooperating with law enforcement when information was requested to identify offenders.

Illegal token issuance

Amidst ongoing controversy over the safety of its users, Livingston decided to launch a coin under the name of Kin.

In early 2017, ICOs were all the rage, with companies sometimes raising hundreds of million of dollars.

The ICO, which raised close to $100 million, was completed in August 2017.

But difficulties arose when the U.S. Securities and Exchange Commission (SEC) claimed Kik’s ICO was illegal because it constituted the sale of unregistered securities.

Kik denied the allegations, noting that its IOC was a token sale and that consumers purchased the tokens for their utility and not as a speculative investment.

Irrespective of which party was correct, the case dragged on for years and nearly bankrupted Kik.

Over $10 million was spent on legal fees, eventually forcing Livingston to announce in September 2019 that he would terminate 80% of his workforce.

Media Labs acquisition

Fortunately for his employees, this decision was reversed after Livingston tweeted that he had found a buyer for his platform.

The buyer was MediaLab, a holding company that was looking to expand its mobile app portfolio. 

An exact price was never disclosed, but the sale of Kik’s messenger service freed up Livingstone to focus on his battle with the SEC and his cryptocurrency initiatives.

SEC settlement

Kik and the SEC eventually settled their case without going to trial for $5 million. Importantly, Kik would be allowed to keep what was left of its $100 million ICO.

Meanwhile, under the direction of MediaLab, the core messenger app was updated when required but lacked any new, innovative features that would create a buzz and maintain or increase user interest.

Business model pivots and monetization

One of the platform’s earlier points of difference was the use of chatbots, which could be accessed in Kik’s Bot Shop and used to play games or interact with other companies.

The company invested heavily in chatbots, and while they were useful under certain circumstances, the chatbot revolution never really came to fruition.

Livingston then decided to start a new company for his ICO while dealing with the SEC and the constant problems associated with the unsafe app.

His propensity to experiment with different business models was understandable because messaging apps are difficult to monetize – a fact compounded by Kik’s mostly under 18 user base.

However, it could also be argued that these constant shifts diluted his focus to the point where it was detrimental to the platform.

Kik remains relatively popular today, but it pales in comparison to competitor services such as Telegram and WhatsApp. 

Read Next: How Does Telegram Make Money, The History of WhatsApp, How Does WhatsApp Make Money.

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