Southeast Asia’s leading ride hailing firm Grab is planning to raise funds in the near future to continue honing its competitive edge against rivals Go-Jek and Uber and grow its presence in the digital payments area.
With about 2.5 million rides daily, Grab claims to be the largest ride-hailing platform and the most preferred app by drivers and passengers in Southeast Asia. It offers services in 55 cities across Southeast Asia, with its mobile app installed across more than 45 million devices.
During an event on Tuesday (June 6) to celebrate its fifth-year anniversary, Grab’s chief executive and co-founder Anthony Tan said: “I can’t specifically give a time line but I can imagine somewhere in the near future, there probably could be more money coming in. That’s probably quite likely.” He added that the business was profitable in certain segments and geographies.
Tan ruled out an IPO until 2018 due to the firm’s cash pile.
Bloomberg had reported early this year that Grab raised more than $1.5 billion from Japan’s SoftBank Group Corp and other investors in its latest funding round — a record for the region. The ride hailing major had earlier raised $750 million in a SoftBank-led round in September 2016 that valued it at $3 billion. Other investors include Didi Chuxing, China Investment Corp, and Vertex Ventures Holdings.
Grab’s co-founders said the ride-hailing platform aims to evolve into a consumer platform that focuses on the crucial elements that come from the convergence of transport and mobile payments. GrabPay, its proprietary mobile payments solution, is reportedly outpacing its transport business, and its user base is projected to double every quarter until the end of 2017.
GrabPay Credits, which is a cashless top-up payments option, has grown more than 80 per cent month-on-month since its launch in December 2016, reflecting growing confidence in Grab’s mobile payments platform.
In an official statement, Tan said, “As Grab’s business has grown, the scale of problems we are solving has grown with it. We are an active contributor to solving Southeast Asia’s fundamental issues: congestion, jobs, trust in and access to the digital economy. These issues affect SEA’s long-term economic growth and Grab is very much committed to investing in our region.”
“The only way to make a meaningful long-term impact is to be laser focused on the important, everyday services to consumers: a more efficient transport network and wider access to cashless payments,” he added.
The fifth-anniversary event in Singapore also saw Grab announce the launch of GrabNow, a new service which digitises the street hailing experience and will initially be available in Jakarta. With this service, passengers can flag down a GrabBike driver on the street, book a ride with the same driver immediately and pay via the Grab app. In addition, it will expand its telematics and GrabChat messaging features to keep improving the user experience.
The ride-hailing service also highlighted its acquisition of Indonesia’s KuDo, which provides financial and e-commerce services. This has established the grounds for Grab’s expansion into financial services.
KuDo Technology Indonesia, LLC is an online-to-offline e-commerce platform that has a network of more than 400,000 authorised agents in Indonesia. Grab aims to leverage this network to deepen its footprint in Indonesia and bring in more riders, drivers and GrabPay users.
As part of its focus on mobile payments, Grab will develop solutions related to lending, deposits, payments, prepayments, and other financial services.
In addition, it is expanding its telematics initiative, which tracks whether drivers are going above speed limits and sends them reminders. This will see Grab also monitor other indicators of safe driving behaviour — hard braking, sudden acceleration and dangerous swerving. The enhanced telematics programme has launched in Singapore and will be progressively rolled out to other countries in the region.