Grab and Go

Hav­ing started out as only a taxi- book­ing ser­vice , ride- hail­ing plat­form Grab is go­ing places, says Sin­ga­pore coun­try head Lim Kell Ja y

Prestige (Singapore) - - FE AT U R E -

Grab be­gan as an entry to a business plan com­pe­ti­tion — now, it has grown into a com­pany with op­er­a­tions in 30 cities across six South­east Asian coun­tries: Malaysia, the Philippines, Thai­land, Sin­ga­pore, In­done­sia and Viet­nam. Launched in Kuala Lumpur in 2012 as the taxi-book­ing app Myteksi (later re­named Grab­taxi) by Har­vard Business School grad­u­ates Tan Hooi Ling and An­thony Tan (grand­son to one of Tan Chong Mo­tors’ founders), Grab’s wide range of ser­vices now in­cludes Grab­car (book­ing pri­vate ve­hi­cles), Grab­hitch (match­ing car­pool driv­ers and riders), Grab­bike (hail­ing mo­tor­cy­cle taxis) and Grab­ex­press (a de­liv­ery ser­vice).

With the ride-hail­ing mar­ket in South­east Asia es­ti­mated to be worth US$2.5 bil­lion last year and pro­jected to hit $13 bil­lion by 2025, ac­cord­ing to a joint re­port by Google and Te­masek Hold­ings, Grab is rid­ing the wave of the boom­ing business in the re­gion.

The start-up en­tered Manila in Au­gust 2013, and Bangkok and Sin­ga­pore two months later. Now, the lat­ter is the com­pany’s fastest grow­ing mar­ket in terms of rev­enue and ride fig­ures, says Lim Kell Jay, Grab’s Sin­ga­pore coun­try head. But the repub­lic wasn’t part of Grab’s ex­pan­sion plans from the start. “We thought our app worked well in a frag­mented mar­ket, where there are many small taxi com­pa­nies but no big ones,” the 32-year-old ex­plains. “But here, you have Com­fort­del­gro and there are only five main op­er­a­tors.” As such, the team didn’t have con­fi­dence of the app’s suc­cess in Sin­ga­pore.

“The qual­ity of [taxi ser­vices here] is gen­er­ally good com­pared to other coun­tries, but an in­ad­e­quate sup­ply was an is­sue — dur­ing peak hours or when it rained, you still couldn’t get a taxi,” Lim says. How­ever, in­vestors were con­vinced the prod­uct was needed in the coun­try.

Ver­tex Ven­ture, the ven­ture cap­i­tal arm of Te­masek Hold­ings, made the first in­vest­ment, af­ter which, GGV Cap­i­tal put in S$15 mil­lion of se­ries B fund­ing in 2014. Last Au­gust, Grab re­ceived $350 mil­lion of se­ries E fi­nanc­ing from com­pa­nies in­clud­ing sov­er­eign wealth fund China In­vest­ment Cor­po­ra­tion. To date, it has re­ceived to­tal VC fund­ing of $700 mil­lion.

Sin­ga­pore has proven to be a strong mar­ket, Lim says, with each taxi mak­ing more rides than their re­gional coun­ter­parts, though the Philippines and Malaysia have more such ve­hi­cles ply­ing the roads. Even then, the sup­ply still fell short by up to 50 per­cent dur­ing peak hours, ac­cord­ing to Grab’s cal­cu­la­tions. To meet this de­mand, the com­pany turned its at­ten­tion to boost­ing its tran­sient sup­ply and, in mid-2014, launched its Grab­car plat­form, which mo­bilises pri­vate cars.

Grab has since es­tab­lished its head­quar­ters in Sin­ga­pore, set­ting up R&D cen­tres here and in Seat­tle. “Sin­ga­pore al­lows us to ac­cess tal­ent, not just lo­cally but glob­ally,” Lim says. The higher labour cost is no de­ter­rence. “You’ve got to pay for tal­ent — we put US$100 mil­lion in the R&D cen­tre [in Sin­ga­pore] and now we have more than a hun­dred en­gi­neers and data sci­en­tists from all around the world.”

Af­ter drop­ping “Taxi” from the app’s name in Jan­uary, Lim says it will con­tinue to fo­cus on growth in South­east Asia: “The mar­kets we are in, we want to go deeper. For ex­am­ple, in Sin­ga­pore, there are about one mil­lion rides ev­ery day, but less than 20 per­cent are booked through smart­phone apps by our es­ti­mates and that fig­ure is lower in other mar­kets. That shows the op­por­tu­nity is huge.”

Mak­ing in­roads into se­cond-tier cities in this re­gion is on the cards — be­sides cap­i­tal metropoles, about 20 cities have pop­u­la­tions ex­ceed­ing 1 mil­lion. And ex­per­i­ment­ing with new ser­vices, such as Grab­hitch, which the start-up re­cently launched in Malaysia, will keep the com­pany nim­ble for years to come.

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