4 Lessons We Can Learn from .ME Unicorn Startups

4 Lessons We Can Learn from .ME Unicorn Startups

The ugly truth is that most startups don’t make it in the end. Those that do, and simultaneously end up valuing at over $1 billion are extremely rare. That’s why we call them unicorn startups.

To succeed in the fierce startup ecosystem, entrepreneurs need to channel their ideas and transform them into viable business plans. And experience shows how hard that is.

So, how do you build a thriving startup? 

Brace yourselves! We are about to unveil the tried and tested success lessons from two increasingly popular .ME unicorn startups. Meet Ele.ME and Line.ME.

Let’s get started!

#1. A Unicorn Startup Will Always Make a Difference

The reasons why startups fail are numerous. And one of them is that the market for their products or services is lacking.

So, why would anyone pour their hearts (and money) into something that does not pay off? Because they came up with bad business ideas that seemed convincing enough to them.

In a 2012 article, Paul Graham provided thought-provoking advice for all aspiring entrepreneurs: “Live in the future, then build what’s missing.” 

In other words, build your products or services around actual market problems and demands

Start by asking yourself: “Does the world need my product/service?”

Ele.ME and Line.ME prove the importance of this phase in startup development. And why is that? Because both of these companies were built to bridge the gap in the market demand.

Ele.ME: The First Food Takeaway Company in China

In Chinese, Ele.ME roughly means, “Are you hungry?”

Ele.ME was started in 2008 by then graduate students Kang Jia and Zhang Xuhao. The launch of this fast-growing startup came from mere necessity. 

“My three buddies and I were planning day and night to no avail but we ordered food deliveries time and time again. Eventually, I couldn’t stand it anymore and said, let’s just do an online food delivery business”. – Zhang Xuhao

Namely, Xuhao and Jia had no time to go to restaurants while they were studying or playing video games. When ordering food delivery, they experienced how slow and complicated the process was.  That’s when they started talking about starting their own delivery service. 

At the time, I was just thinking about starting a business, but I had no idea what I could do. My three buddies and I were planning day and night to no avail but we ordered food deliveries time and time again. Eventually, I couldn’t stand it anymore and said, let’s just do an online food delivery business,” Xuhao explained in an interview for Pandaily.

Line.ME: A Chat App And A New Level Of Communication 

You may have heard about Lee Hae-Jin, the co-founder of Naver, South Korea’s no. 1 search engine. Lee was in Japan when the devastating earthquake and tsunami hit in March 2011. The disaster left millions of people without power and phone lines. With internet connections stable, many people shifted to KakaoTalk, a Korean leading online communications network. 

That is what inspired Lee to launch Line.ME.

Following the disaster, he decided to build an online messaging app that would use data networks and provide instant messaging and calling services. His team of developers created an app, available on smartphones, tablets, and PCs. 

Since they could not compete with Kakao,Korea’s largest chat app, the Naver company decided to launch the app in Japan instead. 

The app was created, tested, and rolled out within two months. It was officially launched as Line in June 2011. 

#2. From Ground Zero To Unicorn Startup Strategic Investments

Many startups fail because of the lack of funding. So building a strong business plan and securing funding is essential to making it as a unicorn startup.

The example of Ele.ME backs me up on that.

The company has developed a unique brand identity and proven its value in the Chinese market. Its popularity attracted the attention of some of the largest industry players. 

In 2015, Ele.ME announced that it raised $350 million in Series E funding from multiple investors. One of them was Sequoia Capital, one of Silicon Valley’s most renowned venture investment companies. Major investments also came from JD.com, Dianping.com, Tencent, and Matrix Partners.

In August 2015, the company finished its Series F funding with additional $630 million. The investment was led by CITIC PE and the Hualian Group, followed by China Media Capital, Gopher Asset, and the original investors mentioned above. 

The major news, however, was the investment from Alibaba that had previously supported Ele’s major competitor in China – Meituan. The Alibaba Group invested $1.25 billion in Ele.ME, which gave them a 27.7% share in the company. 

#3. Prepare Your Business For A Successful Exit

As you already well know, your startup might not succeed. It may run out of cash, fail to meet market needs, or be unable to grow in the competitive market. In that case, startup owners have two options – to close their businesses or prepare them for a successful exit. 

Startups can successfully exit through mergers and acquisitions. Now, let’s see how Ele.ME and Line.ME achieved that.

Ele.ME: Acquisition by Alibaba

During the Series E funding series, Ele’s founders emphasized that the company would maintain its independence.

However, since then they have faced numerous problems. According to Xuhao, the competition was fierce. They needed to compete with deep-pocketed rivals, such as Baidu Inc, Meituan-Dianping, and Alibaba’s Koubei.

On the other hand, their company was still in its infancy. They were burning cash fast. In the abovementioned interview for Pandaily, Xuhao emphasized that “with its current market value of 10 billion US dollars, any investor would think twice before making more investments.

That’s how the company’s founders decided to become a part of the Alibaba Group.

On April 2, 2018, Ele.ME was officially acquired by Alibaba for $9.5 billion. According to the founder of the startup, Ele.ME is today fully integrated into Alibaba’s new retail concept. 

“Looking forward, Ele.ME can leverage Alibaba’s infrastructure in commerce and find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail Initiative,” Alibaba Chief Executive Daniel Zhang explained.

Line.ME: Merger with Yahoo! Japan

In March 2021, Line Corporation merged with Yahoo! Japan, operated by Z Holdings. 

The new company is called A Holdings. 

“We’ll make society convenient with information technology amid growing concerns stemming from the coronavirus pandemic”.

Line’s parent company, Naver Corporation, holds 50% stakes in a new organization. The merged company aims to compete with Chinese, U.S., and Japanese tech giants, such as Amazon, Google, Facebook, Baidu, Alibaba, and Rakuten. 

Through the merger, the company has also accessed three new markets – Taiwan, Thailand, and Indonesia. 

“We’ll make society convenient with information technology amid growing concerns stemming from the coronavirus pandemic,” Kentaro Kawabe, co-CEO of the new firm, explained.

#4. Keep Reinventing Your Brand 

The ongoing pandemic has shown us how rapidly market demands can change. To stay competitive, startups need to listen to their customers and adapt their services to their needs.

Both Ele.ME and Line.ME have at one point decided to expand their services and make them more relevant to their target audience. This is how they did it.

Read more: Pros and Cons of Rebranding

Line.ME: More than Just a Free Messaging Service

Many online communication and chat apps lack user-friendliness. They keep putting more and more things in that are often irrelevant to their users.

Line.ME strives to solve this problem. 

Namely, the goal was to keep the app as simple as possible. They also focused on adding features that go beyond free messaging and that are relevant to their users.

Some of the services Line.ME users can leverage are: 

  • Line Healthcare. A chat-based medical consultation service, letting users consult with the doctor directly via the app
  • Line Clova. An AI assistant 
  • Line Music. A music streaming service
  • Line Payment. An easy, safe, and convenient payment system
  • Line News. The most popular content curation platform
  • Line Voom. (Previously Timeline.) A social platform that lets you discover relevant content
  • Line Antivirus. Affordable antivirus software
  • Line Open Chat. A platform that lets you chat with users with similar hobbies.
  • Line Live. Live streaming service

Ele.Me: Service that Goes Beyond Food Delivery

Since the pandemic started, door-to-door delivery of both food and non-food products has gained immense popularity. To keep pace with the trend, Ele.ME has expanded its categories for delivery to include books, flowers, baby-care products, toys, beauty products, etc. 

Customers can also book various door-to-door services through the app, including manicure/pedicure, housekeeping, or cleaning services. In June 2020, the number of merchants on the platform increased by 30% year-on-year, with non-restaurant industries growing the fastest. 

As a part of their latest upgrade, Ele.ME will also enable interactive content, short videos, live streams, and personalized recommendations. All of this will help nurture relationships between brands and customers on the platform. 

They have also reinvented their loyalty program. Their users can now gain points every time they use the app to place orders. The points can be used for redeeming digital vouchers or discounts for future purchases.

Wrapping Up

There is no one-size-fits-all strategy for starting a business. It depends on numerous factors, including your industry, budget, target audience, etc.

However, there is one thing these successful .ME unicorn startups have taught us. And that is the importance of delivering value to the audience.

These startups came from necessity. They were framed around users’ needs, worries, and challenges. They were built to improve lives

From mergers and acquisitions to diversifying their features, these fast-growing startups have undergone many changes in order to remain relevant. 

Ele.ME and Line.ME have come a long way since their humble beginnings. Today, both companies are leaders in their industries.

Ele.ME and Line.ME have come a long way since their humble beginnings. Today, both companies are leaders in their industries.

Keep rocking, dear unicorns. domain.ME is here to support you on your journey!


Goran Bogunovic

Now, you're probably wondering how I got here! Running a marketing agency, educating people about branding, and helping you to develop your own presence online. To understand, you’ll need to follow me @Domain.Me

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