Line Man Wongnai, a food delivery unicorn, is in talks to acquire Delivery Hero SE's Foodpanda in Thailand.
Line Man Wongnai, a food delivery unicorn, is in talks to acquire Delivery Hero SE's Foodpanda in Thailand. The move is part of the company's plans for a stock-market debut in the next few years, according to people familiar with the discussions.
At one point, Bangkok-based Line Man Wongnai was considering a deal worth around $100 million. However, with the deterioration of the wider market and internal views toward loss-making businesses, the value is likely to have changed, said one of the people familiar with the matter. The company is backed by Line Corp. and Singapore sovereign wealth fund GIC Pte.
No final decision has been made and talks could still fall through, sources said. Representatives for Line Man Wongnai and Line declined to comment. Representatives for Delivery Hero and Foodpanda didn’t immediately respond to requests for comment.
A potential takeover by Line Man Wongnai would bolster the company's pursuit of a spot among Thailand's top online shopping platforms. Southeast Asia's second-largest economy counts Line as its most popular messenger app. Tokyo-based Line merged with SoftBank Group Corp.'s Z Holdings Corp. in 2021 and is a major shareholder of Line Man Wongnai.
Singapore's GIC has led a $265 million investment round for Thailand's newest unicorn. This is the latest in a series of investments by GIC in Thai startups.
Line Man Wongnai was formed in 2020 from the merger of delivery service Line Man and Thai restaurant review platform Wongnai. Its valuation topped $1 billion when it raised $265 million this year. Grab Holdings Ltd. and Foodpanda are its biggest competitors in Thailand.
Delivery Hero is seeking to accelerate its plan to reach profitability by 2023. Chief Executive Officer Niklas Oestberg suggested during a conference call a month ago that while the company has a strong position in countries such as Malaysia and the Philippines, it may exit in some markets where it’s not No. 1. “We are not looking to sell our Southeast Asia business, but there may be markets in Southeast Asia, or in other regions, where we are in discussions,” he said.
This has led to speculation about whether ride-hailing and food delivery giant Grab may be considering acquiring some assets. Grab's chief financial officer, Peter Oey, said during an earnings call last month that Grab is focused on "organic growth" instead. "Cash preservation is critical for us," he said in response to questions from analysts. "Our bar on M&A is extremely high."
The biggest recent consolidation move in the sector came last week when Turkey’s Getir acquired Berlin-based Gorillas Technologies GmbH for $1.2 billion. This is a significant move for the company, as it will help them expand their reach into the European market.
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