While Snap executives are busy making rounds across the globe to convince investors about their business propositions, Japan-based messaging giant Line is increasing their stake in its Asian clone Snow. The details of the deal were revealed in a regulatory filing which is accompanied with another filing detailing Line’s continued contribution to the social app’s business.
The first regulatory filing has revealed that Line has increased its stake in the Snapchat-clone by almost two-fold. Earlier, it had shelled out about $45 million to pick a 25 percent stake in Snow. But, it is now increasing its holding in the company to 48.6 percent, a move which is directly aimed to attract attention away from Snap’s IPO. This transaction now values Snow at around 235 billion won ($207 billion) as compared to its previous valuation of 200 billion won ($177 billion) during the first stake purchase.
And as we’d reported last time, this deal holds more meaning to it than meets the eye. However, if you observe closely, you will notice that both Line and Snow share the same parent company – Naver. This makes them a cousin of sorts, who’re steadily combining their resources to together build a social empire in Asia. The consolidation will enable them to improve the efficiency of individual services, in order to push for rapid expansion and user growth.
It has been revealed in another filing that Line has been closely working with Snow since its initial investment in September. Today’s investment further builds on their partnership as Line has agreed to provide Snow with its own photo app stack. The messaging giant is handing over access to its core Line Camera app, selfie-focused app B612, food-focused app Foodie and makeup preview app Looks to its sister company. This will help Snow build upon on its existing camera tech, further, laying ground work against Snapchat.
Line is one of the most popular messaging apps in Asian countries, especially the four which it caters to extensively. Its current user count stands at 217 million and most of them are concentrated in Japan, Indonesia, Taiwan, and Thailand. In the previous quarter, the company has seen a downfall in its user base — from 220 million to 217 million. It has recently made its dual debut on the Tokyo and New York stock exchange. Though the share prices opened 50 percent higher than the IPO but the performance has since been lackluster.
Snow, on the other hand, is also very concentrated to particular regions, mainly Japan, Korea and China, when talking about its user base. It has amassed as much as 40-50 million monthly active users in January and has bagged an acquisition offer from the king of social media — Facebook itself. But, the latter has since adopted a different strategy. Giving a hat tip to Snapchat, it has now started baking its ephemeral messaging and stories feature into all of its apps — Instagram and WhatsApp.
