Southeast Asia’s Grab launches new venture to back growth-stage tech startups

Photo: Grab

In a significant move in the region’s startup ecosystem, ride-hailing major Grab, which recently took over Uber’s Southeast Asia business, has officially launched its innovation arm, Grab Ventures, that will invest in startups in sectors like mobility, fintech, logistics and food-tech.

The funding that will come from Grab’s own balance sheet is set to look at Series B funding rounds and beyond, said Grab Group CEO and Co-Founder Anthony Tan on Tuesday as he announced the launch of Grab Ventures at the Innovfest Unbound 2018 event in Singapore.

“How do we choose? One, the company should be in the growth stage. We are looking at Series B and beyond. We are going from Singapore and Indonesia all out, across the region. Also, they will be in the sectors that we know very well: mobility. Fintech, logistics, food delivery, food tech,” he announced.

Grab, which is seen as the flag-bearer in the Southeast Asian tech startup ecosystem, has, in its six-year journey, already made a few investments and acquisitions. It acquired Indonesian startup Kudo, India’s iKaaz and, in a recent move, partnered in-car commerce startup Cargo to enable its drivers to earn extra money through in-car e-commerce.

Grab Ventures is looking to make about 10 investments over the coming two years. It will also offer an accelerator programme, Velocity, for growth-stage startups looking to expand across Southeast Asia. EDB and EDBI will also join the Velocity programme as early partners, with a shared goal of supporting the growth of tech companies that could solve challenges in or revolutionize the digital, logistics, transportation and fintech sectors.

Grab Ventures will allow the firm to develop new technology capabilities and build fast-growing businesses in-house as it continues to add new services to its O2O mobile platform. It is also ramping up innovation in-house to scale faster as the leading O2O mobile platform in Southeast Asia.

“GrabCycle, a marketplace for multiple personal mobility partners, is an example of an in-house venture that Grab nurtured and launched. Grab’s increasing ecosystem of services will also provide more income and growth opportunities for its network of driver, delivery and merchant partners,” Grab said.

In Singapore, Grab is partnering with Singapore government agencies such as the Info-communications Media Development Authority of Singapore (IMDA) and Enterprise SG, tapping on their networks and startup support programmes to help companies grow and scale faster. Areas of support span from capability development, market access and start-up facilitation, regulatory support and grants.

Grab now has businesses like GrabFood, GrabPay and currently offers services in Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar and Cambodia. The company more than doubled the growth of mobile app downloads within the past year from 45 million in June 2017 to 100 million to date, it claims.

The company is riding on the favourable demographics in Southeast Asia, a region with over 600 million people where the internet penetration is estimated to touch over $200 billion by 2025.

With regard to the ride-hailing business, several regional players are in the race to take a pie even after Grab’s $1.6 billion acquisition of Uber’s Southeast Asia business in March. For instance, Indonesian ride-hailing startup Go-Jek has said it will invest $500 million to expand into Vietnam, Thailand, Singapore and the Philippines in coming months.

This portal had earlier reported that Grab rival Go-Jek has also launched its venture arm, Go-Ventures, and has hired former Northstar Group and NSI Ventures (now Openspace Ventures) executives to helm the unit.

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