Grab steps up game in Southeast Asia

DiDi and Softbank open their wallets wide for Grab's current financing round

The ride-hailing firm yesterday announced that DiDi Chuxing (DiDi), the world’s leading one-stop mobile transportation platform, and SoftBank Group Corp. (SoftBank), a global technology leader driving the Information Revolution, will invest up to $2.0 billion to lead Grab’s current financing round.

Grab anticipates that it will raise an additional $500 million, bringing the total to $2.5 billion in this round from existing and new investors. This is the largest single financing round in the history of Southeast Asia.

DiDi and SoftBank will continue to support Grab’s vision of helping customers in Southeast Asia access safe transportation and financial products, whilst creating employment opportunities. Grab is by far the most dominant on-demand transportation platform in the region, with a market share of 95 per cent in third-party taxi-hailing and 71 per cent in private vehicle hailing.

The company will continue to strengthen its already-leading market position and invest in GrabPay, its proprietary mobile payments solution.

Anthony Tan, the group’s CEO and co-founder, said that, “We are delighted to deepen our strategic partnership with DiDi and SoftBank. We are encouraged that these two visionary companies share our optimism for the future of Southeast Asia and its on-demand transportation and payments markets, and recognise that Grab is ideally positioned to capitalise on the massive market opportunities. With their support, Grab will achieve an unassailable market lead in ridesharing and build on this to make GrabPay the payment solution of choice for Southeast Asia. We look forward to continuing to work with our valued partners in the future.”

“Starting with transport, Grab is establishing a clear leadership in Southeast Asia’s internet economy based on its market position, superior technology, and extensive local insight,” Cheng Wei, founder and CEO of DiDi, said. “By deepening our strategic partnership, DiDi and Grab reaffirmed our shared commitment to innovating localised solutions to global urban development challenges on the world’s fastest growing marketplaces. Both companies look forward to working together with communities and policy-makers across Asia to fully embrace the extraordinary opportunities in the upcoming transportation revolution.”

Grab has been making extreme headways in the region, ruling 95 per cent of the market

Grab operates the largest transportation network in Southeast Asia and is one of the most frequently used mobile platforms in the region, with nearly three million daily rides. The Grab app has been downloaded onto over 50 million mobile devices, giving passengers access to the region’s largest land transportation fleet comprising over 1.1 million drivers.

Masayoshi Son, chairman and CEO of SoftBank Group Corp., said, “Grab is using technology to address transportation and payments, some of the biggest challenges in Southeast Asia at the moment, and we believe Grab is a tremendously exciting company in a dynamic and promising region. SoftBank is excited to deepen this partnership and we look forward to continuing to support Grab’s journey.”

Grab offers private car, motorbike, taxi, and carpooling services across seven countries and 65 cities in Southeast Asia, with one out of every three passengers using multiple services. GrabPay Credits, a cashless top-up payment option, has been growing at more than 80 per cent month-on-month since its launch in December 2016, a testament to consumers’ wholehearted trust in Grab’s platform.

The new investment is expected to help Grab continue on its growth trajectory, widening the gap with its rivals. According to TechinAsia, Uber famously quit China in 2016 after selling its local business to incumbent Didi. It has recently exited Russia after a deal with local ride-hailer Yandex.

As the company stares down controversies and competition at home and abroad, investors are reportedly making the case for Uber to cut deals with other local competitors in various regions, including Southeast Asia.

Here, Grab and Go-Jek have diversified activities, moving from ride-hailing to payments and commerce, in an effort to capture more high-frequency transactions and revenue.

Uber has chosen a different path. Additional services, like UberEats food delivery, have not been widely introduced in the region. While Grab and Go-Jek gained traction in their respective markets, Uber has trailed behind in most aspects. It did close up in 2016, but the gap could be widening again.

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