Kik Interactive, Inc. is the latest well-known company that plans to go the ICO way. Kik has announced its intent to launch of its own cryptocurrency on the Ethereum platform. Ontario, Canada headquartered Kik has plans for an Initial Coin Offering or simply ICO later this summer wherein it will launch Kin – its own cryptocurrency that will serve as a foundation for a decentralized ecosystem of digital services. Founded in 2009, Kik Interactive is one of the most popular chat apps especially among teens. The Kik platform connects people and allows them to use chat-based services. Kik claims to be the fifth most-searched term in the iOS App Store.
Kik has come under fire in recent years, as reports surfaced that some predators used the messaging app to contact underage children.
“Kik believes that Kin can bring together a broad group of participants to create an open ecosystem of digital services that prioritizes consumer experience and choice,” said Ted Livingston, Founder and CEO of Kik. “As a leader in the chat space, we want to bring a fair and sustainable model for digital services to the market and fuel an alternative ecosystem for communications, information, and commerce.”
Kik has laid out a four-step plan to create a decentralized ecosystem of digital services:
- Create Kin on Ethereum – Kin will be created and implemented as an ERC20 token on the public Ethereum blockchain and will facilitate the interoperability with other digital services in the Kin Ecosystem.
- Integrate Kin with Kik – Kik will integrate Kin inside its app as the transaction currency. It believes, “By natively integrating the Kin wallet into the app, it will instantly become one of the most adopted and used cryptocurrencies in the world.”
- Develop the Kin Rewards Engine - Starting with introducing Kin into circulation as a daily reward among stakeholders, Kik is looking to build an ecosystem overtime wherein “Kin Rewards Engine will be implemented as a fully decentralized system based on smart contract technology.”
- Launch the Kin Foundation – The foundation will oversee the transition of the Kin Ecosystem to a fully to a fully decentralized self-operating model.
“We believe cryptocurrency is the next important business model innovation in tech,” said Fred Wilson, partner at Union Square Ventures and Kik board member. “Kik will be the first mainstream application to integrate a cryptocurrency. This could be a watershed moment for the blockchain sector.”
Kik’s track record speaks of it as an innovative company. It was the first chat app to turn into a platform in 2011 and then went on to become the first Western chat platform to integrate bots in 2014. In December 2014, it introduced “Kik Points” a kind of digital reward earned for completing offers. Kik Points was “a program that helped people earn points to get special themed Stickers and Smileys.” It continued to experiment with it in 2015 and 2016, eventfully shutting-down the program.
Back in August 2015, Tencent – a dominant player in the Chinese online and mobile market and creator of ‘WeChat’ - one of the world’s fastest growing social apps, made a $50 million strategic investment. To date, Kik has raised $120.5 million from Foundation Capital, RRE Ventures, Spark Capital, SV Angel, Union Square Ventures, and Valiant Capital Partners, including Tencent’s investment. (Related reading, see: What is Tencent?)
Initial Coin Offerings are becoming an increasingly popular way of fundraising. In 2017, so far, companies have raised about $180 million vis-à-vis $101 million in 2016 in ICO’s, according to Smith+Crown.