With existing investor Japan’s Softbank Group Corp. in the lead, $750 million fresh capital added to Grab’s funding as part of its Series F round. The increase in subsidy is said to be a take to prepare for a head-to-head battle with Uber Technologies Inc. as the ride-hailing industry grows in Southeast Asia.
After the U.S.-based ride sharing mogul’s sell-off of its China operations to Didi Chuxing, plans of expanding across neighboring Southeast Asian countries seem imminent. According to a source familiar with the company’s immediate plans, they are loading up on resources, staffing, and technology currently deployed in SEA.
This expansion will create a tight competition for the four year-old Grab, as it seeks to use the additional funding acquired to further stretch the area of availability of its services, specifically in Indonesia, the fourth most populous country in the world. It also operates in neighboring countries like Singapore (their headquarters), the Philippines, Malaysia, Thailand, and Vietnam.
Grabs latest venture capital fund acquisition raises its valuation at over $3 billion.
Grab is reported to have up to 1.5 million daily bookings in the 31 cities where it operates. It offers private car (which covers half of the Southeast Asian market), motorcycle, taxi (covering 95% market share in third-party taxi-hailing services), and carpooling services.
“Grab is using this funding to try to diversify because the ride-hailing industry, in terms of profitability, is still a big question. Grab need to hedge risks and diversify,” Canalys research analyst Rushabh Doshi said regarding the Singapore-based company’s move to raise funds.
“The additional funding and diversification will give Grab buffer to fend off Uber’s attack,” he added.
“We are particularly excited about the growth opportunity in Indonesia, where we see an almost $15 billion market for ride-hailing services alone, as well as the potential to extend GrabPay’s platform regionally,” CEO and co-founder Anthony Tan said in a statement.
In addition to the company’s expansion to motorbike hailing, carpooling and delivery services since its launch in 2012, Grab attempts to try its luck on the mobile payment platform in Indonesia, its biggest market to date.
There is zero news on going autonomous though, which its U.S. rival has been currently testing in Pittsburgh with the hopes of rolling out more fully in the near future. U.S. is not the only country hyped by self-driving cars though. Nutonomy is running test in Singapore so Grab is expected to catch up with the trend.
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