Mobile messaging apps have exploded in popularity over the past year. Kik, a mobile messaging app based out of Canada has raised a $38.3 million Series C round of funding and announced some big news as it purchased the GIF messenger Relay in its first acquisition deal.

The new round of funding is led by Valiant Capital Partners and includes participation from SV Angel, and Millennium Technology Value Partners. RRE Ventures, Foundation Capital, Uninion Square Ventures and Spark Capital are all existing Kik investors who also pitched in for the round.

This brings Kik’s total funding to $70.5 million and the company also claims to have 185 million registered users.

Ted Livingston, CEO and co-founder of Kik says the round started off as a strategic investment opportunity but when news spread of US-based Tango’s $280 million round of funding led by Chinese commerce giant Alibaba things changed.

Livingston says the company tweaked its focus and brought on additional investors so they could raise a full round but didn’t feel the need to raise as much as Tango.

“We’re making real revenue, and I’m not even sure we can spend $40 million as it is. We could have raised more to serve our ego, but it would have been a distraction that we don’t want at this point,” said Livingston.

GIF messaging app Relay was also acquired by Kik for an undisclosed amount. Relay, which is also based in Canada has 700,000 users and sends over 10 million GIFs on its site every month. Its apps for iOS and Android are scheduled to shut down on December 15 and Relay’s team will then shift their focus on helping bring the best parts of the Relay experience to Kik.

Founders of Relay Joe Rideout and Jon McGee will reportedly take on important roles at Kik, which will boost the company’s staff to around 60.

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