Grab, Southeast Asia’s largest cab hailing company, announced on Wednesday that it will raise $1 billion from Japanese auto giant Toyota. Last year, Toyota had invested in Grab through its investment arm Next Technology. However, this time the Japanese auto giant has invested in the cab-hailing major on its own.
As part of the arrangement, Toyota will get a seat in company’s board of directors team and one of its representatives will become an integral part of Grab’s executive team. The cab-hailing major said that partnership with Japanese auto behemoth will help in efficiently improving its operation further and to increase their driver’s income.
Toyota is the second auto company to invest in the Singapore headquartered startup. Earlier this year, South Korean auto giant Hyundai made a strategic investment in Grab. Globally, more and more auto companies are investing in ride hailing applications and self-driving technology. Apart from Toyota and Hyundai, General Motors, Honda Motors and Daimler AG are some of the leading auto companies that have invested in this space.
Several analysts claim that this trend has emerged partly because auto companies fear that increasing popularity of ride hailing services may make car ownership unnecessary in future.
Meanwhile, Grab has been in thick of actions during last few months. Barely two months back, the cab hailing major probably pulled off one of the biggest deals in the industry as it bought Uber’s cab-hailing business in Southeast Asian market. The high profile deal was result of Uber’s desperation to make an exit from all the loss-making markets as it prepares for its much anticipated IPO in 2019.
Following the deal, Grab now enjoys a complete monopoly in all the key Southeast Asian market including Malaysia, Indonesia, Philippines, Vietnam, Thailand, Myanmar and Cambodia. The company has also opened a major development center in Seattle in order to attract promising tech talents from the U.S.