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Report: mobile messaging app Line files for $10B IPO

Line will debut on Tokyo Stock Exchange, then plans to go public in the United States

Financial trends and news by Steven Loeb
July 15, 2014 | Comments
Short URL: http://vator.tv/n/3824

(Updated with confirmation from Line)

If there is one space that has been hotter than all others this year it has been mobile messaging. With a series of big deals, everyone wants in on it. And those that are already established are ready to cash in.

One of the fastest growing, and most popular, mobile messaging apps is Japanese company Line, which has been able to more than quadruple its user base in less than four years. It was reported last month that the company was looking to go public, in both its home country and in the United States, and it looks like that process is already starting to come to fruition.

Line filed the paperwork to go public on the Tokyo Stock Exchange, it was reported by Bloomberg on Tuesday. The company is being valued at over 1 trillion yen, or $9.8 billion. 

the company will hire Nomura Holdings as the lead underwriter of that offering. There is no indication of when the company will be listed in Tokyo.

In addition, it had also been speculated earlier that Line could follow a group of Japanese companies that have filed to public in the United States, and it seems as though that is still the plan. It will go public in the United States after doing so in Japan.

The lead underwriters for the U.S. IPO will be Nomura and Morgan Stanley. That could happen as early as November, and the a listing could take place on the Tokyo bourse and either the New York Stock Exchange or Nasdaq.

The mobile messaging space

As I said earlier, mobile messaging has been an extremely hot space this year, with a slew of high profile acquisitions and investments. They have included Rakuten's $900 million purchase of Viber, Alibaba's $215 million investment in Tango, and, of course, Facebook's massive $19 billion purchase of WhatsApp.

The Tokyo-based Line has also been one of the hottest and fastest growing companies in the space, quadrupling its user base in just a few years. Line reached the 100 million mark in March 2011, just ahead of its IPO, and then took nearly another two years to reach 200 million in January of last year. By April of this year, it doubled that number to 400 million.

The Japanese mobile messaging platform makes its money by offering both games and emoji, or stickers, that customers can purchase and then use to communicate with one another, as well as personalize their user profiles.

The company's revenue in the last three months of 2013 was 12.2 billion yen or $119 million, an increase of more than fivefold from a year earlier. Roughly 60% of that revenue came from its games, while another 20% came from sticker sales. In March, the company revealed that it has surpassed 300 million game downloads.

Asian IPOs

When Line goes public on a U.S. exchange, it will be following a series of other companies from that part of the world that have crossed the Pacific to go public in the United States this year.

That includes Chinese online cosmetics retailer JuMei, which is looking to raise $400 million. 

Two Asian companies have already made their debut this year: Chinese online direct sales company JD.com filed to raise $1.5 billion in January. The company made its debut on Nasdaq in May, where it raised $1.78 billion. On the other hand, Sina Weibo filed to raise $500 million in March. When it went public in April, though, it came up short, raising only $285 million

The big one, though, is going to be Chinese internet giant Alibaba. The company filed for its U.S. IPO in May, and is expected to raise over $15 billion, more than the $12 billion Facebook raised in 2012.

Update:

Line has confirmed the report to VatorNews with the following statement:

"LINE, a principal subsidiary of the Company, is evaluating a potential listing in Japan and/or the United States. In connection therewith, LINE has submitted certain documentation, including a listing application, to relevant authorities such as the Tokyo Stock Exchange. However, determinations regarding whether to ultimately list, listing venue and listing timing, etc, have not been made. We will provide an update once such determinations are made or within one month of this disclosure. "

(Image source: line.me/en)


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