Line expands with DGM59 acquisition

Firm committed to investing in Thailand

The team of DGM59, now the engineering team at Line Thailand, show off a few key company stickers.

Line Thailand has bought a local startup, DGM59 Co, its first local acquisition, which will become one of Line Corporation's engineering development sources.

Line's engineering development teams were earlier located in Japan, Korea and Taiwan, with Thailand now the fourth spot.

The company said it is committed to investing in Thailand, the second largest base for Line, boasting 41 million users as of July 2017.

"We are committed to investing here and thus have tried to localise our products and services for local users," said Ariya Banomyong, managing director of Line Thailand, adding the company has complied with local legislation.

The company tried to set up its own software development team a year ago, but faced problems recruiting people with the requisite technical skills, so it opted to make its first acquisition in Thailand, DGM59, a seven-year old software house, with 20 people.

"We are open to any possible models, acquisitions or joint-ventures as was the case with Rabbit Line Pay," said Mr Ariya. The acquisition of DGM59 would enable Line to launch new products and services faster and spur the development of new, home-grown services in Thailand.

The acquisition, made for an undisclosed amount, was completed in mid-June.

DGM59 is one of Line's Business Connect partners. Last year, DGM59 developed a social customer relationship management approach for Line's official accounts, complementing Line's services and products. Since then it has fostered a close partnership with Line, focusing on building solutions on top of Line's platform.

The team of DGM59 has already transferred to Line Thailand.

"We plan to double or triple the size of the engineering team as soon as possible and we anticipate that the DGM59 developers will attract more talented employees to Line," said Mr Ariya.

The engineering team is further expected to enhance the capabilities of Line's existing products, including Line Man, Line Today and Line TV.

With the credit card penetration rate in Thailand remaining low, the opportunities for other payment alternatives are high.

Line Pay, for example, can be hooked up to a user's bank account, facilitating payments both off and online.

DGM59, a startup company, has years of experience producing custom software for the marketing industry. The firm has sought new ways to engage and interact with users, applying cutting-edge technologies to solve real-world problems.

Poomphat Techapoonnine, one of the co-founders of DGM59, said Line provides a corporate culture that will allow the team to continue innovating.

"We will strengthen our local products first and then export them in Line's global market,"' said Mr Poomphat.

Mr Ariya said the Line platform helps bridge the online and offline worlds by helping local businesses reach broader groups of users and increase their revenue, particularly local merchants.

This provides a knock-on effect to the Thai economy, as those merchants can pay taxes to the government.

The managing director declined to disclose details of the corporate taxes paid in Thailand, only saying the company complies with local law. He believes that a more solid policy for over-the-top business regulations is required.

The company's revenues is generated by games, stickers and advertising on Line Today, Official Accounts and Line TV.

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