Grab, Uber Technologies Inc’s biggest ride-hailing competitor in Southeast Asia, said it expects to raise $2.5 billion in its latest financing round that will help bolster its leading position in the region and grow its payments platform. Chinese peer Didi Chuxing and Japan’s SoftBank Group Corp, both of which are existing investors, will invest up to $2 billion to lead the current financing round, it said in its statement on Monday.
Grab expects to raise an additional $500 million, bringing the total to $2.5 billion in this round, which it said would be the largest-ever single financing in Southeast Asia. The firm will be valued at more than $6 billion at the close of this round, according to a source close to company.
The Singapore-headquartered company says it has a Southeast Asia market share of 95 percent in third-party taxi-hailing and 71 percent in private vehicle hailing. It operates private car, motorcycle, taxi, and carpooling services across seven countries in the region, with 1.1 million drivers.
“With their (Didi and SoftBank’s) support, Grab will achieve an unassailable market lead in ride sharing, and build on this to make GrabPay the payment solution of choice for Southeast Asia,” Anthony Tan, group chief executive officer and co-founder of Grab, said in the statement.
Building on soaring user numbers of its Grab ride-hailing app and GrabPay function, the five-year-old start-up aims to transform into a consumer technology firm that also offers loans, electronic money transfer and money-market funds. Grab bought Indonesian payment service Kudo earlier this year, and has said it is seeking more acquisitions to support rapid growth.
Grab competes with the likes of Uber, the world’s largest ride-hailing service, and Indonesia’s Go-Jek in Southeast Asia, which is fast becoming a battleground for startups vying for the attention of about 600 million people.
Tencent Holdings Ltd invested around $100 million to $150 million in Go-Jek, sources told Reuters earlier this month.
Grab’s fundraising comes at a time when San Francisco-based Uber has been beset by complaints about its workplace culture, a federal inquiry into software to help drivers avoid police, and an intellectual property lawsuit by Waymo, the self-driving car unit of Google parent Alphabet Inc. Grab’s previous 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) Ltd.