RIDEHAILING FIRM GRAB TO GET $2.5 B FROM SOFTBANK, DIDI

Ride-hailing firm Grab expects to raise $2.5 billion to spend extending its lead over Uber Technolgies Inc. and expanding into financial services, in the latest injection of funds into South-East Asia’s burgeoning tech scene.

Chinese peer Didi Chuxing and Japan’s SoftBank Group Corp will contribute most of the money, which a person close to the Singapore-based firm said would value it at $6 billion.

The investment would be the latest in a Southeast Asian tech start-up, as major companies seek growth in the region’s huge developing economies with young, tech-savvy demographics. Chinese social media firm Tencent Holdings Ltd put up to $150 million into Grab’s Indonesian peer Go-Jek, sources said this month, while in June, Alibaba Group Holding Ltd spent an additional $1 billion to raise its stake in Singapore-based e-tailer Lazada.

Grab’s fresh fund-raising is “a real endorsement of the potential and promise” of South-East Asia’s start-up community, said Dane Anderson, a vice-president at researcher Forrester.

Didi and SoftBank are already investors in Grab and other ride-hailing services globally.

The pair will add $2 billion, and with $500 million from others, the fund-raising will be South-East Asia’s biggest-ever single round of financing, Grab said on Monday.

“With their support, Grab will achieve an unassailable market lead in ride-sharing, and build on this to make GrabPay the payment solution of choice for Southeast Asia,” Anthony Tan, group chief executive officer and Grab co-founder, said in a statement.

Grab operates private car, motorcycle, taxi and carpooling services across seven countries with 1.1 million drivers. It said it has a market share of 95% in third-party taxi-hailing and 71% in private vehicle hailing in South-East Asia.

But its share could be under threat as San Francisco-based Uber, the world’s largest ridehailing service, is expected to increase its focus on the region after it folded its China business into Didi last year.

Grab said it plans to expand its research and development expertise and look for any strategic investment opportunities.