Thai unit of Japan's LINE Corp raises $110 million, merges with domestic partner

Thai unit of Japan's LINE Corp raises $110 million, merges with domestic partner

By Chayut Setboonsarng

BANGKOK (Reuters) - Thai food delivery platform LINE MAN, a unit of Japanese chat app LINE Corp, said on Thursday it raised $110 million from BRV Capital Management and merged with a local restaurant aggregator, as competition heats up among such services.

LINE's service is battling competitors such as Singapore-based Grab, Indonesia’s Go-Jek and Foodpanda, of Germany’s Delivery Hero SE for a piece of the pie in Thailand, with more planning their entry.

"This is the first time that any entity in the LINE Group has secured a financial investment of this size for one of its overseas services," LINE said in a statement.

Menlo Park-based venture capital firm BRV, an investor in e-commerce payments processor Paypal and Google-owned online mapping company Waze, did not disclose the size of its stake in the business.

The delivery service will also merge with domestic partner, restaurant review and discovery platform, Wongnai Media, which has a database of 400,000 restaurants in Thailand.

"This capital investment aims to strengthen the newly merged entity and expand its development," LINE said, adding that it planned to widen operations to 15 more regions in Thailand this year, beyond the nine provinces where it has a presence now.

Domestic lenders, Siam Commercial Bank Pcl and Kasikornbank Pcl, which have stakes in Go-Jek and Grab, respectively, plan to launch food delivery platforms of their own this year.

"As a single entity, it strengthens them to move faster," Pumin Yuvacharuskul, co-founder of TripAdvisor-backed Eatigo, which focuses on dine-in reservations, told Reuters, referring to the merger.

Despite a surge in demand for food delivery during the pandemic, the industry faces risks from changes in regulations and customer behavior.

In June, the government said it would regulate online delivery rates after customers complained during virus-linked lockdowns.

"We are seeing the behavior for delivery sticking in the short term, but not in the long run, with some dine-in markets bouncing back even better before lockdowns," said Pumin, adding that competition was turning the sector into an ocean of red.