Waterloo messaging app seeks possible suitors

Boasting 200 million users, Kik considers sale or partnership in view of instant chat being ‘incredibly hot space right now’

Kik Interactive Inc., which makes a messaging application popular with young teens, is looking at a possible sale or partnership, the company’s founder and chief executive officer has confirmed.

The Waterloo-based company has hired Qatalyst Partners, a San Fran- cisco-based investment bank, to explore its options, Ted Livingston said in a statement emailed Thursday to the Star.

“Chat is an incredibly hot space right now, and we’ve been getting a lot of approaches for acquisitions for quite a while,” the statement said. “We finally decided we should at least consider all the options.

“So, now we’re talking to pretty much every company to see what a partnership might look like. We hired Qatalyst, who we’ve known for years, to help us do that, but we remain committed to building Kik as an independent company,” Livingston also said in the statement.

Qatalyst most recently acted as advisers to Informatica, an enterprise software company, on a $5.3 billion (U.S.) deal to be taken private by London-based Permira and the Canada Pension Plan Board.

Kik is betting that larger corporations may want to capitalize on the increasing popularity of messaging applications.

Snapchat Inc. recently raised funding from Alibaba Group Holding Ltd. at a $15-billion valuation, and last year Facebook Inc. acquired WhatsApp Inc. for $22 billion.

Kik says it has more than 200 million registered users, with more than 250,000 joining every day.

Kik has raised about $70 million, including $38.3 million in November 2014, when it purchased Torontobased Relay, adding short animated images to its messaging service.

Qatalyst Partners was hired to set up conversations with potential acquirers or corporate investors in Silicon Valley and Asia, people familiar with the process told Bloomberg.

Kik has about two years’ worth of financing and isn’t in danger of running out of cash, the person said.

Ahandful of University of Waterloo students started Kik in 2009. With files from Star wire services