Waterloo-based Kik Interactive has raised a US$50 million (C$65.3 million) strategic investment from Chinese tech giant Tencent, valuing the maker of the popular North American chat network at US$1 billion.

Kik said in a press release on Tuesday that the Series D financing will be used to double the size of the company. Tencent is creator of the chat app Weixin, or WeChat, which is extremely popular with young people in China.

The deal is significant because the capital and connections should be able to help Kik increase its penetration and to develop a “chat-based ecosystem” for young Americans. For Kitchener-Waterloo, it is another step toward the community’s goal of building a cluster of major tech companies. And the deal creates another Canadian unicorn, or a company with a $1 billion valuation.

“Last year, Kik founder and CEO Ted Livingston stated his intention to make Kik the ‘WeChat of the West,’ pointing to the power of Weixin to facilitate connections and enable an ecosystem built around messaging,” said the press release. “This investment allows Kik to further pursue that goal with the support of Tencent.”

Founded in 2009, Kik has about 240 registered users, with 70 percent of them aged between 13 and 24 years. The company says that 40 percent of U.S. teens use the product. The teens now use Kik mainly for its chat function, but Livingston aspires to add functionality so his clients – who will grow in spending power as they grow older – will use Kik for a range of tasks.

This is what Weixin has already achieved with its product in China. Its customers use the product to facilitate numerous other transactions, including booking taxis, shopping, ordering food, paying utility bills, playing games, and other functions.

"We think chat will be the simplest way to connect with the world around you," said Livingston in the statement. "Consumers and developers alike are suffering from app overload, and we are increasingly seeing the potential for services to be delivered in better, lighter-weight ways through chat, especially with bots. Companies like Slack, Telegram, and Facebook are also starting to realize this."

Kik plans to use the funding to grow its team in Waterloo and invest in compelling chat-based services. The company also has offices in New York, Los Angeles, and San Francisco.

According to Crunchbase, Kik has now received a total of $120 million in funding, mainly from a host of U.S.  venture capital funds.

Kik is now the latest member of the club of Canadian unicorns. The other members include Vancouver-based Avigilon, Ottawa’s Shopify, Vancouver-based Hootsuite and Slack, based in Vancouver and San Francisco.