Instant messaging app maker Kik is set to acquire Rounds, an Israel-based firm behind an app enabling users to share HD quality video chat and live games with up to 12 contacts at a time.
While financial details were not disclosed, media reports estimate a figure of around $60 million to $80 million.
Kik said it hopes the acquisition will boost its expression and group video features, which it launched in December 2016 (TechCrunch reported Rounds was behind this service).
It also marks its first product and engineering centers outside of Waterloo, Canada, in Tel Aviv, Israel and Toronto, Canada.
“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.
“The company has very strong product and engineering experience, and we’re excited to join forces to achieve our goal of making chat the central hub for everyday life.”
Dany Fishel, CEO of Rounds, said he saw Kik as the perfect partner to expand his app’s reach to such a vast audience, adding that “we’re eager to build the next great platform together”.
Rounds has more than 40 million users and has raised a total of $24 million in funding from investors, including Sequoia Capital and Samsung Ventures.
In August 2015, China’s internet giant Tencent invested $50 million in Kik, with Kik stating that “there are only five other companies in the world that see the world like we do — Tencent, Line, Facebook, Snapchat and Telegram”. The investment apparently valued it at more than $1 billion.
All of Rounds employees will join Kik, bringing its total headcount to 165. Kik’s product and engineering center in Toronto will focus on chatbot platform development.