Viber Is Being Sold To Rakuten For $900 Million

Several days after it categorically denied acquisition rumours, instant messaging and VoIP platform Viber is being bought by Japanese e-commerce giant Rakuten.

The deal is worth $900 million – a huge amount for a company that generates almost no revenue and has never raised venture capital. After the acquisition, the messaging service is expected to continue operating as normal.

“Viber understands how people actually want to engage and have built the only service that truly delivers on all fronts,” founder and CEO Hiroshi Mikitani said in a statement to Bloomberg. “This makes Viber the ideal total consumer engagement platform for Rakuten as we seek to bring our deep understanding of the consumer to vast new audiences.”

New ownership

Cyprus-based Viber is among the companies whose messaging services are blamed for the decline of texting. It has over 280 million registered users around the world, and fiercely guards their privacy – a fact that doesn’t sit well with authorities in Saudi Arabia, where the application has been unavailable since 2013.

On Tuesday morning, Israeli business publication Calcalist reported that Viber was being bought by an Asian competitor for between $300 and $400 million. The Viber press office told TechWeek that the company was not negotiating a sale, and was completely surprised by the rumours.

Rakuten, founded in 1997 by Mikitani, is one of Japan’s largest Internet companies, operating in a similar way to Amazon. Besides running the largest e-commerce site in its home country, it owns the Kobo e-reader and Play.com, a UK-based online marketplace – both were acquired in 2011.

Various Rakuten services have about 200 million registered users in total. The company says it became interested in Viber because it offers “a hybrid range of services rarely found on competing platforms”. Rakuten is planning to integrate the instant messaging capability into its e-commerce and digital content products.

This could give the company enough muscle to challenge Line, the dominant instant messaging app in Japan developed by Naver Corporation, which has around 300 million users.

Rakuten says it “aims to be the global No. 1 Internet services company”, and “this acquisition will allow the company to build on several digital contents services, and advance into new markets.”

In June 2013, TechWeek met founder and CEO of Viber Talmon Marco at the LeWeb conference in London, to talk about the death of SMS, privacy and Eastern Europe. You can watch the interview here.

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