SoftBank To Invest In Japan's Largest Messaging App
SoftBank is investing in Japan’s largest messaging app company after recently announcing losses in billions from its investments.
SoftBank is known for making large investments in companies they believe will effectively disrupt markets. However, these large investments are not paying off. It has invested in startups such as Wag, a dog walking company, and WeWork. WeWork has cost SoftBank $4.6 billion in losses. WeWork failed to provide a financially sustainable business model coupled with a failed initial public offering.
However, SoftBank has taken another gamble with another major tech firm. The company is seeking to acquire Line, which is one of Japan’s leading tech companies. The goal is to combine it with Yahoo. Doing so, would allow the two companies to package their services into one lucrative app.
However, the move must be first approved by investors and government regulators. Given that these are two of the largest tech firms in Japan, the government might exercise major scrutiny against the investment.
“There are a lot of synergies. Line is the strongest messaging company, and Yahoo is a strong domestic media company. There are very few overlapping areas,” said Mitsunobu Tsuruo, an analyst at Citigroup Global Markets Japan.