Kik messaging app avoids collapse in sale to MediaLab
Kik Interactive sold its eponymous mobile messaging app and other select assets to MediaLab, a Los Angeles-based holding company whose brands include Whisper, for an undisclosed amount of cash.
Why it matters: The app has over 300 million registered users, but was in jeopardy of being shuttered due to legal costs related to Kik's ongoing dispute with the SEC over an initial coin offering for its Kin cryptocurrency. A source says that the deal will leave Kik with around 20 core developers to work on Kin.
Between the lines: The cap table won't change for Kik, which has raised around $120 million in VC funding from firms like Foundation Capital, RRE Ventures, Spark Capital, and Union Square Ventures. Kik also maintains around 30% of all Kin tokens.
The bottom line: Kik's future remains murky, as there is no indication that it and the SEC will resolve their differences out of court. The agency recently settled with Block.One over a similar set of issues, but also won a judicial order blocking Telegram from distributing around $1.7 billion of its own digital tokens. A hearing on the Telegram situation has been pushed back from this week into next February.