Grab said to mull separate fundraising for e-scooter service GrabWheels

Singapore-headquartered ride-hailing unicorn Grab is exploring the option of raising capital for its e-scooter rental unit GrabWheels separately, DEALSTREETASIA has learnt.

We had reported in March that Grab had explored a similar move for its financial services unit, Grab Financial, and held talks with Alibaba’s Ant Financial for a capital infusion. TechCrunch later reported that the company had also fielded interest from US payments giant PayPal.

Grab CEO Anthony Tan eventually confirmed in May to The Financial Times that the Southeast Asian startup was indeed considering such a move for both its payments and financial services unit. with a spinoff likely “at a later date”.

The potential fundraising being mulled for GrabWheels is being driven more by strategic reasons than financial ones, an executive aware of the development told us.

“Grab is looking to rope in a strategic investor such as an OEM or a technology partner that can help it run the e-scooter business,” an industry executive aware of the development said.

In several Southeast Asian cities, Grab feels that its e-scooter arm can offer last-mile connectivity – from taxi/MRT and bus stations to homes and offices – and can also be used for intra-city transport is business districts and residential areas. It can also become a key part of its food delivery unit, GrabFood, and grocery delivery unit, GrabFresh. Grab has also picked up a stake in grocery delivery startup HappyFresh, which can also utilise the e-scooter services.

In this, Grab is adopting a different approach than peers Lyft and Uber in the US that have been picking up stakes in e-scooter companies themselves. The Southeast Asian startup is of the view that it can build out this division with strategic partners, who have an equity stake in the business, rather than buying startups in this space.

DEALSTREETASIA has reached out to Grab for comment.

Plans for the GrabWheels fundraising are at an early stage still and ultimately depend on interest from takers for the deal. If it comes through, it is likely to be structured similar to the unicorn’s deal with Thai retail behemoth Central Group, where the latter invested in Grab’s local unit, instead of at the holding company level.

Central had in January this year confirmed that it had picked up a minority stake in Grab Thailand for $200 million. The move allowed Central to tap Grab’s ride-hailing, food delivery and payments services in the country, while giving Grab access to Central’s wide retail network to entrench its services more deeply in the market.

GrabWheels is a relatively new vertical under Grab Ventures, its venture building arm. It launched the beta version of its service last November at the National University of Singapore’s (NUS) Kent Ridge campus. Last month, GrabWheels launched a subscription plan for its food delivery partners in Singapore, citing strong interest from GrabFood’s merchant partners.

GrabWheels has rolled out its services in Indonesia too. Last month, Grab announced a partnership with Indonesian real estate conglomerate Sinar Mas Group to offer e-scooter rentals in one of the township cities, Bumi Serpong Damai in Tangerang, Banten.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.