South Korea’s Hanwha leads $300m round in Grab’s financial services arm

Grab Financial Group (GFG), the financial arm of Southeast Asian ride-hailing and food delivery major Grab, raised over $300 million led by South Korea’s Hanwha Asset Management, per an announcement.

This marks the Series A round for the company.

Other investors who participated in the round include K3 Ventures, GGV Capital, Arbor Ventures, and Flourish Ventures, Grab said in a statement.

“We are at an inflection point in Southeast Asia, as the pandemic has accelerated the need for digital financial services that help us grow and protect our incomes,” Grab Financial senior managing director Reuben Lai said.

The fundraising, which Grab said is aimed at further accelerating access to financial services for millions across Southeast Asia, is the first external funding for the decacorn’s fintech business. The funding also came after the Grab-Singtel consortium was selected by the Monetary Authority of Singapore to set up a full digital bank in December last year.

The size of the financial services market in Southeast Asia is expected to touch $60 billion by 2025.

“We expect GFG to continue its exponential growth on the back of an innovative business model which supports the changing broader lifestyle of consumers, as well as its highly synergistic relationship with Grab,” Hanwha Asset Management CEO Yong Hyun Kim said.

Meanwhile, Silicon Valley-headquartered Flourish Ventures, a venture of The Omidyar Group, highlighted how traditional financial service providers have struggled to reach the long tail of small-value customers and are unable to assess the large number of customers without formal income sources. “GFG has the advantage of tapping into a highly engaged customer base from the Grab ecosystem comprising drivers, riders and merchants,” Flourish Ventures managing partner Tilman Ehrbeck wrote in a post on its website.

DealStreetAsia first reported in March 2019 that Grab was in talks with Alibaba’s Ant Group to raise capital for its financial services arm. Since then, it has been reported that strategic investors such as PayPal, Prudential and AIA have thrown their hat into the ring.

The firm, however, at a group level, has struggled to finalise a $500 million funding round despite garnering strong global investor interest.

One source close to Grab Financial told DealStreetAsia that the firm is also considering a Special Acquisition Purpose Vehicle (SPAC) to raise funds, which may be a speedier and more effective fundraising mechanism compared to private markets. So far, Grab, at the group level, has secured nearly $10 billion to date since its inception in 2014.

Last September, reports surfaced about Alibaba writing a $3 billion cheque for Grab. However, a flurry of events around Alibaba unraveled since then. While its affiliate company Ant Group was forced to pull its record-breaking IPO in November, Chinese regulators are continuing to hunker down on Alibaba, with recent talks about forcing it to divest its investments to fragment the Chinese giant’s clout over the internet economy.

GFG, which offers payments and financial services across lending, insurance and retail wealth management in the region, will use the new funding to continue helping more individuals and SMEs access the benefits of financial services. It will further invest in talent, and expanding its offerings in Southeast Asia region.

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.