Grab’s record-breaking funding
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