Kik Chat Platform Buying the Israeli Startup Rounds

Deal estimated to be worth as much as $80 million, but much of it is in Kik stock rather than cash

Kik
Kik

Kik Interactive, the Canadian company behind the popular chat platform Kik, said yesterday it had acquired the Israeli startup Rounds to boost its video offerings.

Neither side said what Kik was paying for Rounds, but the Calcalist daily cited sources that said the deal valued Rounder at between $60 million and $80 million. Sources declined to confirm that to TheMarker but they said a large part of the sale was paid for in Kik stock.

An estimate by CB Insights, a tech-industry research house, valued the Canadian company at $1 billion. Kik boasts over 300 million users and is particularly popular among teens. It doesn’t disclose monthly user numbers but some reports have pegged its reach to be comparable to Snapchat’s.

Founded in 2009 by Dany Fishel and Ilan Leibovich, Rounds claims more than 40 million users worldwide and has raised a total of $24 million in funding from leading investors, including Sequoia Capital, Samsung Ventures, Rhodium, Verizon Ventures and DFJ’s Tim Draper.

Rounds’ platform enables up to 12 people to engage in live chat, with the option to do things like playing games, reading stories and more.

“The team at Rounds knows how to build products that make chat fun and entertaining for our teen audience,” said Ted Livingston, founder and CEO of Kik. “Video is the natural evolution of chat and an integral part of expression and hanging out in real life. We saw Kik as the perfect partner to expand our reach to such a vast audience,” added Fishel.

Rounds’ 35 employees will all join Kik and staff the company’s Tel Aviv research and development center. Kik, which is based in Waterloo, Ontario, said on yesterday it was also opening an R&D center in Toronto. The company will have 165 employees all told.