Toyota makes biggest ride-hailing bid

Toyota Motor has agreed to buy a $1 billion stake in Southeast Asia’s Grab in the biggest investment by a carmaker into a ride-hailing firm, at a time when traditional automakers are racing to team up with disruptive tech companies.

The value of six-year-old Grab will be just over $10 billion after the investment, said a person familiar with the matter. The deal comes as the auto industry faces a spike in the need for technological prowess with the advent of features such as autonomous driving, while app makers offer passengers the option to forgo car purchases by connecting them with drivers.

Some automakers have responded by partnering with makers of ride-hailing apps which dominate the fast-growing field of mobility services, in anticipation of a future of reduced car ownership.

General Motors has invested in US ride services firm Lyft, whose rival Uber Technologies is also backed by Toyota. Meanwhile Japan’s SoftBank — also an investor in Grab and Uber — last month said it would invest $2.25 billion in GM’s autonomous vehicle unit Cruise. Toyota’s trading arm invested an undisclosed sum

in Grab last year. This time, the automaker is lead investor in a financing round launched after Grab acquired Uber’s operations in South-east Asia, a region of 640 million people.

Grab called it the largestever investment globally by an automotive manufacturer in the ride-hailing sector.

The Singapore-headquartered firm did not disclose how much fresh capital it aims to raise. It raised $2.5 billion in its last round in July, resulting in a reported value of $6 billion. Grab said it logs six million rides a day via apps downloaded onto over 100 million mobile devices.

The firm also offers online to offline services, such as food delivery and digital payments, which it aims to expand deeper into the region using funds from its latest financing round.