Japan mobile messaging operator Line reportedly is considering a possible IPO filing, potentially by the end of the year — and if so, a Line IPO could be capable of topping the Twitter IPO.
According to Korea’s MT (via The Next Web), the Line IPO could list on either the Nasdaq or Tokyo Stock Exchange, and a deal could be worth as much as $28 billion — $8 billion more than the pegged high end of Twitter’s upcoming offering.
Line actually got its start thanks to Japan’s Tohoku earthquake and tsunami in March 2011. Telecom provider NHN Japan leveraged the Internet and mobile technologies to provide much-needed communications while other vital comm infrastructure was down. It turned out to be a huge success, with Line reaching 100 million users within 18 months.
Since then, the service has seen lots of innovation. For example, Line now has social media features including timelines, blogs and even games.
As of now, Line has 73 million monthly active users, which is much smaller than Twitter’s 215 million — though the latter was started in 2006, so it has a five-year head start. Also, Line currently has 215 million registered users and is projected to hit the 300 million mark by the end of 2013. Importantly, Twitter even mentions Line in the “Competition” section of the S-1 filing.
Line also has been no slouch with monetization, reporting Q2 revenues of $132 million. However, the company has not disclosed bottom-line numbers.
So how might a Line IPO do?
If the company’s growth ramp continues, Line should have no problem fetching a robust valuation. As seen with other Asian Internet companies such as Baidu (BIDU) and Yandex (YNDX), investors definitely have interest in foreign-based social/Internet deals. And when it comes to mobile, there’s still enormous opportunity in Asia.
All this bodes well for a future Line offering.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.