Line to Raise $1.33 Billion For Line Pay, Link Cryptocurrency and Funding Financial Services Platforms
Line to Sell Convertible Bonds to Fund Financial Services Platforms
According to a report published on Reuters, Japanese instant messaging platform Line plans to raise 148.1 billion yen ($1.33 billion) through convertible bonds to finance its financial services section. Line will primarily look to improve the underlying infrastructure of the Line Pay service before allocating the remainder of the funds to newer projects.
The Line Pay service is platform that enables clients to make payments to affiliated merchant stores by linking the app to their credit cards. Since its inception four years ago, the platform has been hugely successful. Besides the features mentioned above, the prosperity of Line Pay is also attributed to the platform's support for peer-to-peer transactions between its members.
Despite its impressive performance in Asia, the Line messenger has struggled to impose itself in other parts of the world. This, however, is understandable, given the competition provided by leading platforms such as WhatsApp and WeChat. Remarkably, Line has managed to increase its revenue substantially, even with the stalled user growth. Now, it seems that the company is resorting to the provision of financial services to further boost its income.
Regarding the launch of financial services, Line has been experimenting with cryptocurrencies for a considerable period. To this end, the company recently announced its plan to introduce a virtual currency token known as Link, along with a corresponding blockchain ecosystem to power the cryptocurrency. Notably, this is not the first time a digital currency is working with Line, as Line Coins have existed for some time. Moreover, the firm also established a digital assets trading platform called BitBox in Singapore at the beginning of the year.
Instead of raising money through the typical ICOs, Line opted to conduct a convertible bonds sale, as mentioned earlier. The move is aimed at circumventing the legal controversies that are associated with ICO events. In a related announcement, Line said that the issued zero coupon convertible bonds would mature in 2023 and 2025.
Apparently, most of the bonds will be issued to Naver Corp, Line's parent company that is headquartered in South Korea. After the bonds are converted into stocks, Naver's share will be equivalent to 70% of the company's total stake.