Ride-Hailing Firm Grab Raises $2 Billion In Funding To Fight Competition
They hope to use the funding for expansion plans around the region.
When Grab announced that it had bought Uber, many of the ride-sharing users were, to put it lightly, pissed. With the lack of competition, would Grab monopolise the market and we would be stuck paying a premium for the same service we got before?
Well, Grab has proven that it wouldn’t hike prices, but its recent drama with changing the rewards systems is not faring well with riders.
Now, the ride-hailing firm has raised US$2 billion to fight competition in the markets it operates in. Ouch.
Since Uber’s business in Southeast Asia was absorbed by Grab, several new players, including India’s Jugnoo and Singapore-based Ryde, have entered the city-state’s ride-hailing market.
It hopes to expand its offerings including electronic payments – GrabPay anyone? – food delivery and courier services. It just launched its on-demand grocery delivery service in Jakarta last month.
A bold move, if you ask us, considering its Indonesian ride-hailing rival Go-Jek has already conquered much of that market.
Go-Jek also announced earlier in May this year that it would invest US$500 million to expand into Vietnam, Thailand, Singapore and the Philippines.
Grab raises $2 billion
Out of the $2 billion raised by Grab, half of it came from Japanese car giant Toyota. The funding also comes from existing investors Didi Chuxing, the company that defeated Uber in China, as well as SoftBank. Grab has shared that a “significant portion” of the proceeds would go to developing operations in Indonesia.
Singapore-based Grab is now operating in eight countries and is expected to be worth US$20 billion by 2025, according to Temasek.
But as of now, a source has confirmed that this new round of funding gives Grab a post-money valuation of more than $6 billion.
The ride-hailing app claims to have over 50 million downloads from users and 1.1 million drivers on its platform. Though the services are primarily focused on licensed taxis and private cars, Grab also offers motorbike taxis, shuttle bus services and carpooling in a selection of countries.
Will Grab conquer the Southeast Asian ride-hailing market? I guess only time will tell.