Delivery app Line Man says it will merge with Wongnai, a restaurant review platform, while securing fresh capital investment worth US$110 million (3.46 billion baht) from BRV Capital Management to bolster the new entity.
The transaction marks the first time any entity in the Japan-based Line Group has secured a financial investment of this size for its overseas service, according to a Line Man statement.
The move is expected to help Line Man as it tussles with other regional players like Grab, Gojek and Foodpanda in the food delivery war.
The large capital raise is another positive sign for Thailand's startup environment in the second half of the year.
Electronic digital media platform Ookbee has announced that it will raise Series C funding by the third quarter. QueQ, a local queue management platform, plans to raise Series B funding by year-end.
The BRV investment in Line Man comes as the delivery app is merging with Wongnai Media. Line Man and Wongnai have been business partners since 2016.
Wongnai has more than 10 million users each month and holds the largest restaurant database in Thailand, with over 400,000 restaurants nationwide. In addition, Line Man app users have been able to order food via the Wongnai database.
This capital investment aims to strengthen the newly merged entity and expand its development as it continues to grow in the Thai market, according to Line Man's statement.
Line Man, which has operated in the Thai market since 2016 under Line Thailand, offers six services: delivery of food, groceries, convenience store items and parcels, plus messenger and taxi hailing services.
Line Man operates in Bangkok and several provinces, including Nonthaburi, Samut Prakan, Nakhon Pathom, Samut Sakhon, Ayutthaya, Chon Buri (Pattaya City) and Chiang Mai, with plans to expand further this year. The app has more than 100,000 partner restaurants.
"We're excited to be working with BRV Capital Management, a growth capital firm that has repeatedly shown it knows how to find and develop winners," said Eunjung Lee, head of global business for Southeast Asia at Line Plus Corporation. "Since its launch four years ago, Line Man has grown into the most popular delivery app for Thais. This investment by BRV Capital Management will help take Line Man to the next level."
BRV is a growth capital firm that led early rounds for PayPal and Waze, and operates local offices in South Korea, Japan and China. BRV is an affiliated entity of BlueRun Ventures, a US-based venture capital firm.
BRV said it decided to invest in Line Man because of the company's ongoing success at delivering innovative services for the Thai market, becoming a "daily assistant" for local users.
Natavudh Pungcharoenpong, founder and chief executive of Ookbee, said the deal signals good investment sentiment among foreign investors for Thai startups and highlights a new type of collaboration in a joint business model, differing from the standard of startups exiting by IPO.
Through resources from Wongnai, the deal will "enable Line Man to compete with regional players Grab, Gojek and Foodpanda".
To date, Line Man still operates mainly in Thailand, Mr Natavudh said.
Ookbee is also in the process of raising Series C funding, which will be completed by the third quarter.
"There are very few Series C-funded startups in Thailand, such as Pomelo and SYNQ [formerly Omise]," Mr Natavudh said.
Ruangroj Poonpol, managing partner of venture capital firm 500 TukTuks, said the pandemic is driving many seed startups out and encouraging investors to invest strictly in established and attractive startups.
Despite receiving funds and merging with Wongnai, Line Man still faces challenges in the online food delivery segment, which is highly competitive, Mr Ruangroj said.
"I believe Thailand will have unicorn startups [valued at US$1 billion] in the next two years," he said.