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Japanese messaging app LINE files for a IPO valued at $10B

line

Japanese messaging app LINE  has filed for an initial public offering (IPO) at the Tokyo Stock Exchange, reports Reuters citing a source. LINE, which is currently owned by South Korea’s Naver Corp., apparently filed for the IPO about two weeks back, valuing it at $10 billion (over 1 trillion Yen).

Nomura Holdings Inc. and Morgan Stanley have been appointed to manage the IPO in Tokyo, and it is also considering a possible listing on NYSE or NASDAQ. LINE has confirmed to the The Next Web that it has submitted a listing application to the Tokyo Stock Exchange and is also evaluating a potential IPO in the United States.

LINE is one of the popular messaging apps in Asia. Its primary competitors are South Korea’s KakaoTalk and China’s WeChat, besides the messaging giant WhatsApp.

The company started focusing on the Indian market last July and had appointed Damandeep Singh Soni as its Head of India Business Development in January this year. It had claimed to have 18 million registered users in India as of April this year. Overall, it had claimed to have 400 million registered users as of April this year, and a Forbes report suggests that it currently has 480 million registered users. 

In comparison, WhatsApp had claimed to have crossed 50 million monthly active users in India last month while Bharti Softbank-backed Hike had claimed to have 20 million registered users last month and Rakuten’s Viber had claimed to have 15 million registered users in India as of February this year. (P.s. note the difference between monthly active users and registered users).

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LINE is taking an ecosystem approach in India, similar to its competitor WeChat, in order to position itself as a better product among the plethora of messaging apps in the market. Earlier in February, Groupon India had partnered LINE to provide daily deals through an official account ‘Groupon Freebies’ on LINE. (Also readHow LINE Is Dealing With A Late Entry Into The Mobile Messaging Market In India)

This year the messaging app space has witnessed a few big-number deals. WhatsApp was acquired by Facebook for $19 billion in February, and Japanese e-commerce major Rakuten Inc. bought Viber for $900 million in the same month.

In-app monetization

LINE has an edge over WhatsApp in monetization. The company’s Q1 2014 had almost tripled on an year-on-year basis to 14.6 billion Yen ($144 million), from 4.6 billion Yen in Q1 2013. Most of LINE’s revenue comes from games and in-app purchases, something which WhatsApp has steered clear of so far.

In-game purchases accounted for 60% of LINE’s revenues in Q4 2013, while an array of large emoticons, which the company calls stickers, fetched 20% of its revenues for the quarter. The messaging app also charges celebrities and brands for official accounts.

Corrigendum: Headline changed to indicate that the Line is not raising $10 billion through IPO, rather the IPO is valued at $10 billion.

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