“We are already a clear leader in online transportation in South-East Asia with a 71% overall market share. We want to grow that further,” said Grab group chief executive officer (CEO) and co-founder Anthony Tan (filepic) to StarBiz.
PETALING JAYA, Malaysia—Grab, a Malaysian start-up that has amassed a dominant market share of the ride-hailing market in South-East Asia, is expanding into financial services with the latest round of fundings.
The company is out to secure US$2.5billion in what will be the largest single financing in the history of South-East Asia for a start-up.
China’s largest ride-hailing company, Didi Chuxing, and Japan’s SoftBank Group Corp, both existing investors in Grab, will fork out US$2bil to lead the current round of funding.
“We are already a clear leader in online transportation in South-East Asia with a 71% overall market share. We want to grow that further,” said Grab group chief executive officer (CEO) and co-founder Anthony Tan to StarBiz.
SoftBank is Japan’s biggest Internet company that has a tech fund of over US$100bil that it has invested in other ride-hailing companies, including Didi and Brazil’s ride-hailing app provider, 99.
“We have a long-time partnership with Didi, as we share the same commitment and leverage on each other’s technologies,” said Anthony.
“With the support of investors, Grab will achieve an unassailable market lead in ridesharing, and build on this to make GrabPay the payment solution of choice for South-East Asia,” said Anthony.
He added that Grab was still looking for new and existing investors for the remaining US$500mil portion.
The new round of funding is expected to be used to grow its payments platform, GrabPay, given the rise in demand for mobile payment methods and Grab having its own GrabPay function.
Many are betting that Grab will transform GrabPay into a consumer technology firm that would be able to offer loans, electronic money transfer and money-market funds. Grab bought Indonesian payment service Kudo earlier this year.
“We are always on the lookout for strategic investment opportunities in regional companies which have great technology and who share our vision to move South-East Asia forward. We want to invest in developing and expanding GrabPay to become the mobile platform of choice for South-East Asia,” he said.
Grab needs the funding to strengthen itself in South-East Asia to capitalize on the rising demand for ride-hailing services and also mobile payments.
This comes on the back of competition from the world’s largest ride-hailing app provider, Uber Technologies. After facing a flurry of issues in global markets including Russia, China and the United States, Uber has turned its focus to South-East Asia and India. Uber recently began advertising its services in a bid to win confidence and also market share.
Grab is now headquartered in Singapore. Anthony is group CEO of Grab and co-founder, and his partner is Tan Hooi Ling. Both were studying in Harvard when they decided to start Grab some five years ago.
Anthony’s grandfather, Tan Sri Tan Yuet Foh, and his grand uncle Tan Sri Tan Kim Hor co-founded the Tan Chong group. His father, Datuk Tan Heng Chew, is the president of Tan Chong Consolidated.
Grab operates private car, motorcycle, taxi and carpooling services across seven countries in the region, with 1.1 million drivers. It recently entered the Myanmar market and has operations in Malaysia, Singapore, Thailand, Indonesia, the Philippines and Vietnam.
With this latest rounding of funding, it is said that Grab could be valued at about US$6bil.
Grab has raised US$1.5bil since it started. Its previous investors include sovereign wealth fund China Investment Corp, hedge fund Coatue Management LLC, venture capital firm GGV Capital and Vertex Venture Holdings – a subsidiary of Singapore state investor Temasek Holdings (Pte) Ltd.
It has six technology hubs, one each in Seattle, Beijing, Singapore, Ho Chi Minh City, Bangalore and Indonesia.
Apart from Uber, Grab faces challenges from local taxis in most of its markets, and both in Indonesia and Thailand, it is also up against Go-Jek, the motorbike taxi on demand. China’s Tencent Holdings Lte is said to have invested over US$100mil in Go-Jek.