The Southeast Asian ride-hailing and logistics services Grab is anticipating to raise about $2.5 billion in a record round of fundraising to secure its lead over its nemesis Uber in the region and grow its payments system.
Southeast Asia has become an essential field of battle for tech startups vying for a market share of over 600 million people, with a flourishing middle class as well as a millennial, internet-savvy demographic.
Grab’s Chinese peer Didi Chuxing and Japan’s SoftBank Group, both of which are existing major investors, will contribute up to $2 billion of combined investments to lead the current financing round, it said in its press statement on Monday, July 24.
The ride-hailing company expects to raise an additional $500 million, bringing the total financing round to $2.5 billion, which Grab said would be the largest-ever single financing round in Southeast Asian region.
Grab will be valued at more than $6 billion at the close of this financing round, according to a source close to matter.
The Singapore-based firm stated that it has a Southeast Asia market share of 95 percent in third-party taxi-hailing and 71 percent in private automotive vehicle hailing. It operates private car, motorcycle, taxi and carpooling services across seven nations in the ASEAN region, with 1.1 million total drivers.
Anthony Tan, group chief executive officer and co-founder of Grab, said in the press statement:
“With their (Didi and SoftBank’s) 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.”
Building on skyrocketing user numbers of its Grab ride-hailing app and GrabPay payment platform, the five-year-old startup company strives to transform into a consumer technology company that also offers loans, electronic money transfer as well as money-market funds.
Earlier this year, Grab acquired the Indonesian payment service Kudo and said it is seeking more acquisitions to support rapid growth of the company.
Grab directly competes with the likes of Uber, the world’s largest ride-hailing service, as well as Indonesia’s Go-Jek in the Southeast Asia. Chinese investment holding company Tencent invested around $100 million to $150 million in Go-Jek earlier this month.
Uber has been expected to increase its focus in Indian market as well as in Southeast Asian region after retreating from China last year.
Grab’s recent investors include sovereign wealth fund China Investment Corp, hedge fund Coatue Management LLC, venture capital firm GGV Capital, and Vertex Ventures Holdings – a subsidiary of Singapore state investor Temasek Holdings (Pte).