Popular messaging app Line seems to want to be more than just a communications tool, as the Japanese company has announced that it will launch its own investment fund called LINE Life Global Gateway, worth around $42 million.
Line launches investment fund
LINE Corp, the owner of the messaging app, will use the fund to invest in companies that provide e-commerce, payment, entertainment and media services. The fund is Line’s strategy to diversify and ensure that its revenues don’t overly depend on the messaging app and games platform, which is where the company currently makes the most cash.
Last year, Line said it would delay its IPO in order to “expand the business globally.” But over the last year or so, the company has focused on diversification. During a conference in October, the COO Takeshi Idezawa (who is now CEO), said “the keyword of our future is ‘life’… Line is the smartphone gateway for your life.”
A lifestyle platform
It seems that Line wants to become more of a lifestyle platform that will cater to all the essential services that are needed from smartphones. Just last week, Line announced that it was expanding to online grocery shopping in Thailand and has also since launched a TV channel. In the past six months, Line has also bought MixRadio from Microsoft, taken a stake in Japanese games company Gumi, and also invested in South Korea’s 4:33 Create Lab Games Studio.
Last month, the company claimed 181 million active monthly users and states that it also managed to grow its Q4 2014 revenue more than 62%, but it still managed to fall short of most analysts’ expectations. Line now aims to push farther into Indonesia, the Philippines, Mexico and Columbia, as well as the States, but the company also wants to make more money from its current markets while solving the issues of growth elsewhere.
Line Pay
The company has also moved into mobile payments recently with the launch of Line Pay, which is directly integrated into the messaging app – it allows users to add a credit card to the app and make payments at physical stores, but in future it will also allow users to send money to each other.
Line has also extended its services to indoor maps, food delivery and taxi services (in Japan), and plans to build a streaming service that will be completely separate from its messaging app. The Line TV and Line Camera apps are separate from the main chat app, but they still offer some integration, for example Line TV lets its users share content via Line and the videos also contain links to the official accounts of the celebrities in them.
Elsewhere in Asia, chat apps such as WeChat and KakaoTalk are popular (We Chat is dominant in China and KakaoTalk in South Korea). Tencent, the company behind WeChat, has also seen its revenues slowing from its mobile games businesses, but it adding more titles and also trying to become a lifestyle platform. WeChat also has a payment service, which can be used to pay utility bills.
There is still a great deal of uncertainty regarding how well the various messaging apps can perform as lifestyle apps, but western equivalents such as Facebook Messenger and Snapchat may take some lessons from them in terms of monetisation.
Larry Banks is a keen follower of technology and finance. He has worked for a variety of online publications, writing about a diverse range of topics including mobile networks, patents, and Internet video delivery technologies.
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