TOKYO • Line plans to use part of the US$1.3 billion (S$1.76 billion) garnered from its initial public offering last month to bankroll acquisitions of content and technology, transforming its messaging service into a one-stop shop for Asian social media users.
Japan's most popular messaging service is gunning for companies in areas ranging from artificial intelligence (AI) chatbots and advertising to video streaming and games, including those with augmented reality features, said chief executive Takeshi Idezawa in an interview.
It has assembled a dedicated team to scope out and review possible targets worldwide. The idea is to build Line into a "smart portal", supplementing its mainstay features of chatting, stickers and games with commercial services such as food delivery, job searches and travel reservations in main markets.
Mr Idezawa said: "What's important is that they are the right fit." Both the business and the talent that comes with it are important criteria, he said.
Messaging services have become prime mobile destinations because they incorporate functions that go beyond simple chatting, such as media streaming and online shopping.
In three to seven years, apps like Line and Facebook's Messenger will evolve into "virtual agents" that provide services well beyond communication, said Forrester Research analyst Julie Ask.
She said one example is Amazon.com's Echo, which deciphers and acts on spoken commands. Tencent's WeChat is increasingly being woven into the fabric of users' daily lives in China, letting them book hotels and buy products from a single app.
Line could offer the same and possibly more. Its users in Japan spend at least five times as much time on the app as they do on Amazon, with activities ranging from chatting to reading news and ordering food.
This creates data that Line can use to better understand customers. In April, it announced the launch of an AI research lab, and funds from the IPO could help it buy start-ups that would speed up development.
"An ad tech acquisition, or investment, could help give Line a leg up," said Bloomberg Gadfly columnist Tim Culpan. To the Line team shopping for acquisitions, he suggested some firms that would add value to its business while benefiting from its reach, technology and existing messaging interface.
He said an outright purchase might not be necessary in most cases, with an investment or a joint venture serving just as well.