In Cars, International News / By Matthew H Tong / 3 August 2018 3:49 pm / 10 comments

Grab announced that it has secured US$1 billion (RM4 billion) in fresh funding and is considering raising more funds as it aggressively expands in Indonesia. This is part of the US$2 billion (RM8 billion) funds raised from the ride-hailing firm’s most recent financing round, in efforts to be the leading technology company in Southeast Asia.

One of the first high-profile investors was Toyota, which poured US$1 billion (RM4 billion) in June 2018. The Japanese automaker is now joined by several other big names, such as OppenheimerFunds, Ping An Capital, Mirae Asset – Naver Asia Growth Fund, Cinda Sino-Rock Investment Management Company, All-Stars Investment, Vulcan Capital, Lightspeed Venture Partners and Macquarie Capital.

Grab President Ming Maa said “we are honoured to welcome these top-tier financial institutions into our roster of strategic investors and partners. Grab is today the industry-changing O2O platform that enables millions of consumers and entrepreneurs to come online and drive the digital economy in Southeast Asia. We have seen overwhelming interest from global strategic investors and partners who are keen to partner with us to capture the region’s booming growth.”

According to Reuters, Grab was valued at US$6 billion (RM24 billion) earlier this year when it acquired Uber’s regional operations. But a source close to Grab said the six-year-old startup is currently valued at around US$11 billion (RM44 billion). Maa said an initial public offering (IPO) will not be its short term focus, because some parts of Grab’s business, including transportation, were already profitable in some markets.

“We will continue opening the financing for certain investors that we think will add value,” Maa told Reuters, while declining to give any funding target. He added that Grab was seeing significant demand from investors globally, both financial and strategic. Grab already counts deep-pocketed investors such as Chinese ride-hailing firm Didi Chuxing and Japan’s SoftBank Group Corp among its backers.

The new funds will be used to expand its online-to-offline services, although the bulk of which will be channeled to expanding operations in Indonesia. This is as competition heats up with major rival Go-Jek, a ride-hailing firm that is looking to expand to Singapore, Vietnam and Thailand, but not Malaysia, as it’s seen as unsafe by the authorities.

Indonesia is dubbed an emerging battleground for tech firms looking to serve a population of over 250 million people, and Grab has earmarked the nation as a priority market. There, Grab also plans to transform itself into a consumer tech group, offering services like digital payments and food delivery (GrabFood). It has also rolled out GrabFresh, an on-demand grocery delivery service in Jakarta, with other cities to follow later in 2018.

Ride hailing services in Southeast Asia are expected to surge to US$20.1 billion (RM80.4 billion) in gross merchandise value by 2025, up from $5.1 billion (RM20.4 billion) in 2017, according to a Google-Temasek report.

Grab has over 7.1 million micro-entrepreneurs on its platform, more than half of which are based in Indonesia. Together with OVO, Grab’s local wallet and rewards programme partner, they have formed the country’s most widely accepted mobile payments ecosystem with over 60 million downloads.