Didi Chuxing and SoftBank to lead $2B funding round in Singapore's Grab
Grab, the on-demand transportation and mobile payments platform in Southeast Asia, on Monday announced that Didi Chuxing and SoftBank Group Corp would invest up to $2 billion to lead Grab’s current financing round. Grab also anticipates that it will raise an additional $500 million, bringing the total to $2.5 billion in this round from existing and new investors.
Story so far
Founded by Tan Hooi Ling and Anthony Tan in 2012, Grab claims to operate the largest transportation network in Southeast Asia. With nearly three million daily rides, Grab notes that their app has been downloaded on more than 50 million mobile devices, giving passengers access to a transportation fleet comprising over 1.1 million drivers.
Grab offers private car, motorbike, taxi, and carpooling services across seven countries and 65 cities in Southeast Asia. Grab also has GrabPay, a cashless top-up payments option, which they claim has grown more than 80 percent month on month since its launch in December 2016. In Indonesia, Grab claims to have a network of 500,000 agents helping the unbanked and underbanked utilise GrabPay’s platform to participate in the digital revolution.
The Didi-Softbank deal
Grab claims to be the most dominant on-demand transportation platform in south-east Asia with an estimated market share of 95 percent in third-party taxi-hailing and 71 percent in private vehicle hailing. With this round of funding led by Didi and SoftBank, the company aims to strengthen its market position and also further invest in GrabPay.
Anthony Tan, Group CEO and Co-founder, said, “We are delighted to deepen our strategic partnership with DiDi and SoftBank. We’re encouraged that these two visionary companies share our optimism for the future of south-east Asia and its on-demand transportation and payments markets....”
Cheng Wei, founder and CEO of Didi, believes that Grab is establishing leadership in south-east Asia’s internet economy based on its market position, technology, and local insight. He said in a statement,
By deepening our strategic partnership, Didi and Grab reaffirm our shared commitment to innovating localized solutions to global urban development challenges from the world’s fastest growing marketplaces. Both companies look forward to working together with communities and policymakers across Asia to fully embrace the extraordinary opportunities in the upcoming transportation revolution.
Masayoshi Son, Chairman and CEO of SoftBank Group Corp said, "Grab is using technology to address transportation and payments, some of the biggest challenges present in south-east Asia, and we believe Grab is a tremendously exciting company in a dynamic and promising region."
Sector overview
In December 2015, Ola, Grab, Lyft, and Didi Chuxing had formed a global alliance to take on Uber. Since then there have been multiple consolidations in the cab aggregator space. Uber sold off Uber China to Didi Chuxing, while Didi invested $1 billion in Uber, which in effect kind of broke the 'global alliance'. More recently in July 2017, Uber merged its operations in Russia with Yandex, with the combined entity believed to be valued at over $3.7 billion. This Didi-Softabank deal with Grab will likely impact Tencent backed Go-Jek, which operates in Indonesia.
Website- Grab