Didi’s investment into Grab reveals its potential game plan post-Uber

Photo credit: Grab

If the global ride-hailing startup market is a solar system, China’s Didi Chuxing is probably its Jupiter. Its immense gravity well has snared several other companies in that space, fundamentally altering their trajectories.

Everyone has been wondering what happens to other ride-hailing companies in the wake of the Didi – Uber China cosmic event, and especially the “anti-Uber” alliance between Didi, India’s Ola, the US’ Lyft, and Southeast Asia’s Grab. We now have a bit of an indication.

According to Bloomberg, Didi and SoftBank have almost clinched a deal to pour a further US$600 million into Singapore-headquartered Grab. Both companies are existing investors in Grab, as well as Indian counterpart Ola.

So what’s happening? First let’s look at Grab itself.

Grab is getting a welcome shot in the arm

It’s not that Grab is in dire straits or anything – a look at its most recent financials shows that it’s got plenty of cash in the bank. In fact, the company told Tech in Asia it hasn’t even touched its series E money yet.

But the same financials, despite not painting a complete picture, show it’s going to be a while before Grab Singapore breaks even, let alone turns a profit. US$600 million should top up that bank account nicely.

… because Uber is not its only problem

Grab’s biggest rival in Southeast Asia is, of course, Uber, which is expected to make a more concerted effort in the region after pulling out of China. But that’s not the only battle Grab is waging.

The company has been at war with rival Go-Jek in Indonesia for a while now, with each company trying to one-up the other with new features and products. While Go-Jek was until recently only involved in bike ride-hailing, it partnered with leading Indonesian taxi provider Blue Bird in May to offer taxi rides as well.

In a war with multiple fronts, a large war chest is a good thing to have.

Of course, Didi looms large over this battlefield as well.

Didi’s endgame

In an infographic created by CB Insights, the current landscape of ride-hailing companies and their investors looks more confusing than a Game of Thrones character breakdown. But one particular strand stands out: Didi has invested in all of the ride-hailing companies involved in this battle, including the anti-Uber alliance and Uber itself.