Didi and Softbank to invest $2b in Grab; round may reach $2.5b

Grab boss Antony Tan is overseeing the startup’s bloody battle against Uber. Photo credit: Grab.

Southeast Asia’s leading transportation app Grab has new ammunition to battle rivals Uber and Go-Jek. The Singapore-headquartered company announced today that its two largest shareholders – China’s Didi Chuxing and Masayoshi Son-led Softbank – are investing up to US$2 billion to lead its current funding round.

Grab expects to raise an additional US$500 million from existing and new investors, bringing the round’s total to US$2.5 billion. Jack Ma’s Alibaba was supposedly eyeing to join in.

The company says this is the largest single financing in the history of Southeast Asia – a claim confirmed by Tech in Asia data.

It will use the fresh cash to tighten its grip on the region and invest in its mobile payments solution, GrabPay.

“We’re encouraged that these two visionary companies share our optimism for the future of Southeast Asia and its on-demand transportation and payments markets, and recognize that Grab is ideally positioned to capitalize on the massive market opportunities,” said co-founder and CEO Anthony Tan.

This latest US$2.5 billion anticipated round will bring Grab’s total disclosed funding to US$3.9 billion, based on Tech in Asia data. The company’s previous US$750 million funding came from Didi and Softbank as well.

TechCrunch also reported that this new investment might give Grab a post-money valuation of more than US$6 billion, making it the region’s most valuable startup.

When asked about this, Grab said, “we don’t publicly comment on our valuation, especially as the round has not yet closed at this point.” The firm also declined to say when it expects the thing to close.

Grab offers private-car, taxi, motorcycle, and carpool services across seven countries and 65 cities in Southeast Asia. The app completes nearly 3 million rides daily and its network of drivers has reached over 1.1 million, according to the company. It claims to have been downloaded onto over 50 million mobile devices so far. Its GrabPay solution “has grown more than 80 percent month-on-month” since its launch in December 2016.

Hot race

While arch-rival Uber doesn’t disclose its numbers for Southeast Asia, data from analytics firm App Annie shows Grab is proving to be the more popular app.

Like Didi, Grab believes its greatest asset against Uber is its local expertise. Last year, Uber pulled out of China, selling its unit to Didi. Then just a week ago, it exited Russia after a deal with local ride-hailer Yandex. Still, Uber has deep pockets to put up a good fight. To date, it has raised US$8.81 billion in over a dozen rounds, according to Crunchbase.

In Indonesia, it’s a three-way battle – with homegrown player Go-Jek in the mix. Go-Jek, which supposedly raised US$1.2 billion from Chinese internet giant Tencent early this year, specializes in motorcycle taxis and has expanded to include food and package deliveries, cleaning services and more.

Grab’s push into digital payments further heats up its rivalry with Go-Jek, which also has a digital wallet called Go-Pay.