KITCHENER - The Kik messenger app has a new owner, but its millions of users will soon notice some changes to the service.

On Friday afternoon, technology holding company MediaLab announced it had finalized a deal to buy the app from Kitchener-based Kik Interactive, ending weeks of speculation about its fate. Terms of the deal were not disclosed.

"Kik has shown an incredible ability to provide a platform for new friendships to be forged through your mobile phone," said a blog post from MediaLab that was posted on the Kik website Friday.

"We believe that Kik's best days remain ahead of it."

MediaLab, based in Santa Monica, Calif., said it has some ideas for improving the service, and is asking users to help them by emailing suggestions to ideas@kik.com.

Kik CEO and founder Ted Livingston said the deal is "awesome" for Kik's millions of users, and he's happy to see a new company take over the service he launched almost a decade ago.

"The idea that there's a great company coming in to grow and evolve Kik ... I couldn't imagine a better win-win," he said Friday afternoon.

Significant changes to the app are coming, however. In order to better optimize the service, MediaLab will discontinue the video chat toggle and the third-party bots platform (not including Ragebot, which combats spam bots) for now.

MediaLab will also introduce ads in a "nonintrusive" way, meaning there won't be any full screen ad videos.

"As part of that long-term commitment, we need to ensure that we're able to cover our expenses," the blog post said.

Livingston said those changes make sense. He added that MediaLab has shown it can introduce ads in a way that's respectful for users.

MediaLab could not be reached for comment on Friday.

Earlier this month, Livingston told the Record the company had signed a letter of intent with an unidentified tech company interested in buying the app.

It was expected to shut down Oct. 19 after Kik announced last month it was shuttering the app and reducing its workforce from about 150 to an "elite" 19 in order to focus on its cryptocurrency, Kin, and the ongoing fight with the U.S. Securities and Exchange Commission (SEC).

It's the second major announcement from Kik this week. On Thursday, news broke that Carta, a Silicon Valley equity management software firm, had agreed to hire 51 former Kik employees and take over Kik's office space in Kitchener.

Livingston said they spent about two months "and a lot of money" searching for another company to hire local staff.

"It happened pretty fast," he said of the negotiations with Carta. "We got a list together pretty quickly, and Carta was one of those companies."

Livingston said he's happy with the Carta agreement, and that it's a "win-win" for everyone involved - Carta has hired a skilled team familiar with the community and each other, and the employees won't lose their jobs.

"They'll get to stay together at a great company, that company will open a major presence in Waterloo, and they'll get to continue to work together," he said.

Kik realized it needed to reduce its staff from 150 - 75 each in Waterloo and Tel Aviv - as part of its legal battle with the SEC, he said.

Loading... Loading... Loading... Loading... Loading... Loading...

The messaging app cost about $1.5 million per month to operate, and Kik never found a way to reliably monetize the free service after its initial launch in October 2010. It had an estimated 300 million registered users as recently as 2017, and the company was valued at US$1 billion in 2015.

Livingston said about 95 per cent of the 75 former local Kik staff members remain employed following the shakeup, either with Carta or as the 19 retained to operate Kin.

"There were some very specialized roles we couldn't find a fit for, but there was only a handful, and we did everything we could to treat those people really well," said Livingston. The entire workforce remained employed throughout the negotiations, he said, adding he couldn't come up with a similar agreement for the Tel Aviv employees.

In a blog post put up Thursday afternoon Carta CEO Henry Ward said he was "thrilled" with the deal with Kik.

Founded in 2012 as eShares, Carta is a software platform that helps companies and investors manage equity and ownership. Earlier this year, the San Francisco-based company was valued at about US$1.7 billion. It has seven offices in the U.S. and one in Brazil.

The Waterloo office is its first in Canada.

Carta spokesperson Nolan Church declined to answer questions related to the hiring process, the negotiations with Kik, or employee compensation. He said the company is still hiring in this region, and its office is now open.

"We chose Waterloo because of the huge talent pool in the area," he said in an email. The new team will focus on research and development for Carta "with the shared goal of building a product that will drive the future of equity ownership for companies, employees and investors."

When asked if Carta would have opened an office in the region without the Kik deal, Church said: "This was a perfect opportunity to expand into Canada with a team of incredibly talented individuals."

jjackson@therecord.com

Twitter: @JamesDEJ