Kik raises $50M through private sale of its Kin token to institutional investors and plans to raise $75M more in ICO
Jonathan Keane / CoinDesk :
Context & Ripple Effects
Kik's Kin announcement in May 2017 set out to make a cryptocurrency the primary transaction currency inside the app, built on Ethereum. This raise is the financing leg of that pivot: Kin was announced as an Ethereum-based token, and now Kik is selling $50M of it directly to institutional investors before opening a planned $75M public ICO.
The structure matters because Kik is a consumer messaging company, not a protocol startup — two years earlier it took $50M from Tencent at a $1B valuation as an equity play, and this token sale marks a different funding model entirely. The path from here runs through the SEC: the sale eventually drew a multi-year legal fight that ended in a court-approved $5M fine against Kik.
First-order effects
- Institutional investors get Kin at a negotiated price before retail buyers, giving them a head start on the token that Kik intends to make the app's sole transaction currency.
- Kik banks $50M immediately with a further $75M planned, effectively replacing venture equity with token proceeds as its operating capital.
Second-order effects
- Selling to institutions first, then the public, put the sale squarely in securities-law territory — the SEC dispute that followed forced Kik into a three-year battle resolved only by the $5M settlement.
- Rival consumer apps watching the raise had to weigh whether in-app tokens were a monetization edge or a regulatory liability; Kik's outcome became the cautionary data point.
Third-order effects
- If the pattern holds, consumer-app token raises get priced not just on adoption but on expected enforcement risk — the Kik settlement established that even a completed, widely sold token can be retroactively treated as an unregistered security.
- The episode pushes app developers toward either compliant structures or, as Kik itself attempted with its Ethereum-Stellar hybrid blockchain, building infrastructure designed around the token rather than bolting one onto an existing product.
The trend: Consumer internet companies are experimenting with raising capital through their own in-app tokens instead of equity, with securities regulators emerging as the decisive constraint on the model.