Japanese messaging app, Line, said this week it plans to list shares in Tokyo and New York next month through an initial public offering (IPO) that would value it at $5.5 billion (R83 billion).
Line is a popular messaging app in Asia and growing in popularity in Europe and America. It also offers users free VoIP video and voice calling.
Launched in 2011, the company recently announced it had more than 500 million downloads in the Google Play Store. Line also claims it will have more than 700 million users by the end of this year, but reports show only 218 million of them are active.
In comparison, Facebook Messenger said earlier this year it had 900 million active users and WhatsApp over a billion.
Arthur Goldstuck, MD of World Wide Worx, says Line has, "more functionality than WhatsApp, a more user-friendly interface than iMessage, and a better gaming interface than Facebook."
He says it compares with WeChat and QQ on financial services and stickers.
"Its fundamental differentiator, however, is its emphasis on cuteness - particularly of the paid-for stickers - which might not go down as well outside its core markets."
How will they make money?
Line is a free-of-charge app that generates revenue through sales of electronic stickers and tokens for in-app games, as well as services such as music streaming and taxi hailing.
According to the IPO, the company earns more than $20 million per month selling sticker packs. The digital stickers cost between $1-2 for sets of 12-18. Other messaging apps that offer stickers are Telegram, Facebook Messenger and Viber.
The popularity of stickers has made smartphone manufacturer, Apple, build the functionality into their operating system.
At the Apple developer's conference this week, a huge focus in iOS 10 was messaging and emoji. The company has taken note that users want to adorn their messages with stickers and have made this easier to do within Apple's native messaging app, iMessage.
Line also releases separate apps for niche purposes. Earlier this year, Line launched an app called Foodie that helps users take better pictures of their food. And another app called Egg, for extravagantly-filtered selfies. These apps also sell add-ons in app.
Crowded messaging space
Goldstuck says Line is not yet a serious competitor to Facebook Messenger, WhatsApp and WeChat.
"However, with 218 million users, one can't ignore it," says Goldstuck.
"If one looks at the followings of some official accounts, you can also see its commercial appeal beyond messaging.
"For example, Maroon 5 has 17.7 million followers, and used it to promote its 2015 tour of South Korea, Taiwan and Indonesia. Taylor Swift has 23 million followers and uses it for general promotion, which gets massive engagement. Wall Street journal has 2.4 million followers on Line, which is more than its subscriber base, albeit not paid," explains Goldstuck.
Line has not yet caught on in South Africa. Goldstuck says it has a very small user base here and not a single official account (companies or celebrities that sign up as partners on Line) in sub-Saharan Africa.
However, Goldstuck says "no space is too crowded if you come up with a better mousetrap or social trap, and can convince people to use it."
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