NEW YORK, Aug 29 (Reuters) - Kik Interactive, the Ontario, Canada-based creator of the global chat platform Kik, valued at $1 billion, said on Tuesday it will launch in two weeks the sale of its own cryptocurrency which is expected to raise $125 million.
Kik is a free chat and messaging application built for teenagers, with about 300 million registered users. It was founded in 2009 by a group of University of Waterloo students.
The cryptocurrency, Kin, will be launched off the Ethereum blockchain, another online public ledger much like that of bitcoin, the original digital currency.
Sale proceeds will be used to build a new platform: the Kin ecosystem, which will offer a host of decentralized products and services, according to Kik’s white paper.
“We believe there is an opportunity to fundamentally change how digital services are built, used and monetized,” Kik founder and Chief Executive Ted Livingston said in a blog post on Tuesday.
The new Kin platform should give consumers a slew of digital services while compensating them for the value they contribute to those services, he added.
With the token sale, Kik would be the first non-blockchain social media application to create its own digital currency. The token sale is a capital-raising scheme employed by blockchain companies that entails creating a digital asset and selling it to the public.
Blockchain is a digital ledger of transactions underpinning bitcoin, gaining global traction with its ability to record and track the movement of assets.
Kin’s public sale will be held on Sept. 12.
Kik has allocated 1 trillion in tokens for the sale. Of that amount, $50 million or 488 million tokens have already been sold in a presale round to select investors, including venture capital firm Blockchain Capital, hedge fund Pantera Capital, and Polychain Capital, another digital currency hedge fund.
The investors in the presale round received a 30 percent discount, Livingston said.
The remaining 512 million tokens will be sold for $75 million on Sept. 12.
The plan is to integrate Kin into the Kik chat platform as the primary transaction currency. With millions of users, Kik said it hopes to drive mainstream consumer adoption of Kin, potentially making it the most widely used cryptocurrency in the world.
Since inception, Kik has raised $120.5 million from institutional investors and venture capitalists including Union Square Ventures, Pitchbook data showed. Two years ago, it raised $50 million in financing led by Tencent Holdings Ltd, the internet company that developed the social media app WeChat. (Reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Matthew Lewis)