Southeast Asian ride hailing giant Grab has officially announced that it has raised $2 billion in fresh funds from Chinese ride hailing company Didi Chuxing and from Softbank Group Corp., a Japanese multinational telecommunications and Internet corporation.
Its existing investor Didi Chuxing said that the funding round can expand by $500 million more considering the interest of other existing backers and even some new investors. In the most recent funding round which was held in September 2016, Grab raised around $750 million which valued the company to around $3 billion. After this $2 billion investment, the post-money valuation of Grab has increased to a whopping $6 billion.
In August 2016, Didi Chuxing agreed to buy Uber’s local business unit in China- Uber China. After Uber agreed to sell its local businesses to a Russian ride sharing business, the investors putting their money in Grab have realized the potential of the company and believe that Grab has what it takes to beat the U.S firm in South East Asia. Apart from Uber, Indonesia’s Go-Jek which is a bike and car on-demand platform reportedly valued at $3 billion is also a major competitor for Grab.
Grab currently operates in around 65 cities around seven countries (Singapore, Indonesia, Philippines, Malaysia, Thailand, Vietnam and Myanmar) in Southeast Asia. It has over 50 million downloads and around 1.1 million drivers on its platform. Grab accounts for around 3 million rides daily. Along with licensed taxis and private cars, Grab also offers taxis, shuttle bus services carpooling in a few major cities. It currently holds 95% of the market share for third-party taxi hailing and 71% in private vehicle hailing in southeast Asia.
The newly raised funding will be used to increase their market share and to bolster its mobile payment platform GrabPay.
At the start of 2017, Grab announced an investment program worth $700 million to expand its services in Indonesia which is south Asia’s largest economy and world’s fourth most populous country. Later, Grab bought offline payment startup Kudo for around $100 million.
Grab’s skirmish with Go-Jek is also backed by Chinese giants Alibaba and Tencent who are influencing their rivalry to conduct a proxy war in the region. Grab is backed by Alibaba while Go-Jek is aided by Tencent.