Grab fuels financial services push

Gojek dismisses tie-up talks reports

SINGAPORE/TOKYO: Grab said yesterday that Japan’s Mitsubishi UFJ Financial Group Inc (MUFG) and IT services firm TIS Inc have agreed to invest a combined $856 million in the ride-hailing firm, as it seeks to expand aggressively into financial services.

MUFG, Japan’s biggest bank by assets, has agreed to invest $706 million, the companies said in statements.

“MUFG’s investment into Grab is a vote of confidence in our super app strategy and our ability to build a longterm, sustainable business,” Ming Maa, Grab’s president, said in a statement.

Grab, backed by SoftBank Group Corp, said it would use the funding to offer lending, insurance and wealth management products and services for Southeast Asian consumers and small and medium-sized enterprises.

MUFG’s deputy president and incoming CEO Hironori Kamezawa said the bank would combine Grab’s advanced technologies and data management expertise with its financial experience.

“We believe that this alliance will also generate additional momentum for our ongoing digital transformation of MUFG,” he said.

Separately, Grab also said that TIS Inc, part of TIS INTEC Group, would invest $150 million in the company.

Given a low interest rate environment at home, Japan’s MUFG has focused on boosting its Southeast Asian business by acquiring stakes in some of the lenders in the region.

“Japan’s progress on the digitization of banking and other fintech lags that of other advanced countries,” S&P Global Ratings associate director Shoki Nagano said in a report.

“Banks must make sufficient investments in new technology, establish flexible and adaptive management suitable for fast-changing environments.”

Grab and Indonesia-based rival Go-Jek are evolving from ride-hailing app operators to become one-stop shops for services as varied as payments, lending, food delivery, logistics and hotel bookings in Southeast Asia.

In Singapore, Grab has teamed up with Singapore Telecommunications Ltd (Singtel) and applied for an online banking licence in the country.

On Monday, The Information, a subscription-based digital media company, reported that Grab and Gojek are discussing a merger.

Management teams from the two companies have talked occasionally over the past few years about a deal, and Grab president Maa and Gojek co-CEO

Andre Soelistyo met earlier this month for the latest discussion, The Information reported, citing people familiar with the matter.

While talks are believed to be ongoing, a big roadblock to a deal is agreeing on control of the combined entity, according to the report.

Gojek said in an e-mailed statement to Reuters that there were no plans for any sort of merger and recent media reports regarding discussions of such a nature are not accurate.

Grab declined comment when contacted by Reuters.