The offering of 22 million American Depository Shares (ADSs) at US$32.84 (RM129.70) each topped the upper end of the expected price range of US$28.50 (RM112.56) to US$32.50 (RM128.35), raising about US$723mil (RM2.8bil).
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Line Corp. surged 27 percent in its U.S. trading debut after the Japanese messaging company raised more than $1 billion in the biggest technology initial public offering of the year.
The company has a particular focus on two-way messaging on the Line app, which it says is the most “rewarding and lasting” form of expression. It is now approaching the size of Twitter, though like Twitter its user growth is slowing, forcing Line to find new ways to make more money off the audience it already has.
Check out our compilation of major messaging apps here, and see how they stack up.
The platform supports advertising and gaming, but it’s known for its stickers. The decline is less pronounced in Line’s home country Japan, where more than 60 million Line users are concentrated.
The company also turned it into a thriving a business.
The app was originally made by a small team at Naver-a Korean Internet service-in CY11 as a communication tool, after a magnitude-9 quake hit Japan, and caused a tsunami.
If Line manages to establish itself in the U.S. and beyond it could be huge, though with such a high number of already popular messaging apps on the market doing so will be no easy feat. Two years ago, Facebook bought WhatsApp for $19 billion.
The idea for the messaging app came out of the 2011 magnitude-9 quake in Japan, when phone lines were tied up, according to Fast Company. It also offers a timeline much like Facebook does.
Facebook hasn’t yet directly monetized Messenger. Statista reported that WhatsApp and Facebook Messenger had a combined user count of 1.9 billion during the first quarter.
“As it will be hard to compete on the mobile messenger business in Europe and the USA, markets to which we want to expand, we will make bold investment into new technologies create new business areas to excel in”, Lee said.
Sato said that users of messaging apps choose service providers based on how widely they are used by their friends and acquaintances, meaning those with the most users have the competitive edge.
But the company does make money. The startup raised $1.26 billion. Revenue grew by 40% in the previous year. The company has experimented with a few monetization strategies, including selling lenses, filters and replays to users and brands.
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“I expect net profit to be around 27 billion yen next year”, said a Tokyo-based fund manager. Firstly there is a tailwind in rapid growth mobile ad-market with (a) offline ad-spend shifting to online; and (b) within online, mobile ad-market taking share from web ad-spend.
