Grab’s record-break­ing fund­ing

Singapore Business Review - - CONTENTS -

When Sin­ga­pore-head­quar­tered ride­hail­ing com­pany Grab raised US$2B from lead in­vestors Softbank and Didi Chux­ing it not only be­came the largest-ever sin­gle fi­nanc­ing in South­east Asia, but also served to fuel its trans­for­ma­tion into a pay­ments ti­tan.

Keen to build on its lead—it claims to cap­ture 95% of the taxi-hail­ing mar­ket and 71% in pri­vate ve­hi­cle-hail­ing—grab will fo­cus on de­vel­op­ing its mo­bile pay­ment plat­form Grab­pay. A Grab spokesper­son said that there is a “huge op­por­tu­nity” for Grab to lead the e-pay­ments sec­tor in South­east Asia given the Grab app’s 55 mil­lion mo­bile down­loads and nearly 3 mil­lion ride trans­ac­tions daily.

A Didi spokesper­son said the strate­gic part­ner­ship with Grab went “as smoothly as ex­pected” and that it chose to in­vest in Grab be­cause of its lead­er­ship po­si­tion and com­mit­ment to tech­no­log­i­cal in­no­va­tions, in­clud­ing de­vel­op­ing a pay­ment plat­form that will “pi­o­neer the trend of mo­bile pay­ment in South­east Asia.” Com­ment­ing on the record-break­ing deal, Mike Davie of Datas­treamx said Grab is a “safe bet” for in­vestors look­ing to pick a win­ner in South­east Asia due to its strong man­age­ment and coun­try-spe­cific ser­vices.

Will the ri­valry turn into a merger?

Cameron Priest of Tradegecko said Grab’s new in­vest­ment will force Uber into some tough de­ci­sions. If it plays its cards well, Grab could even se­cure a monopoly in South­east Asia.

“Uber will have to de­cide if it can af­ford to keep los­ing money go­ing up against the lo­cal well-funded com­peti­tor, or is it bet­ter to bow out of South­east Asia like they did in Rus­sia and China with Uber merg­ing with Didi in China and Yan­dex in Rus­sia. If Uber wants to raise money from Softbank, they may now have no op­tion but to merge with Grab.”

There is a “huge op­por­tu­nity” for Grab to lead the e-pay­ments sec­tor in South­east Asia given the Grab app’s 55 mil­lion mo­bile down­loads and nearly 3 mil­lion ride trans­ac­tions daily.

Grab has the largest land trans­porta­tion fleet in South­east Asia with 1.2 mil­lion driv­ers in 87 cities

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