Microsoft Corp is investing an unspecified amount in Southeast Asian ride-hailing major Grab as part of a deal that will see the latter adopting Microsoft Azure as its preferred platform for cloud services.
This is part of a five-year strategic partnership that will allow both companies to collaborate on technology projects in big data and artificial intelligence, according to a joint statement.
Last year, Microsoft unveiled a similar deal with Flipkart which resulted in the Indian e-commerce major adopting Microsoft Azure as its exclusive public cloud computing platform. Microsoft had also made a strategic investment in Flipkart as part of the deal. Such deals are part of Microsoft’s efforts to propel Azure to catch up with Amazon.com Inc’s AWS, the market leader in this space.
The deal also gives Microsoft a larger foothold in Southeast Asia’s burgeoning consumer market. It is also significant to note that Grab’s rival Go-Jek is backed by Google. However, it is not known if Go-Jek exclusively uses Google’s cloud service platform.
Grab steps up fundraising, targets strategic partnerships
No financial details were revealed on the deal, but Microsoft’s investment in Grab will form part of the $3 billion that Grab is aiming to raise by end-2018. The US tech titan joins the ranks of OppenheimerFunds, SoftBank and Toyota who have all invested in Grab.
Earlier this week, Reuters had reported that existing backer SoftBank was planning to invest an additional $500 million in Grab as part of its latest funding round.
During a fireside chat at DealStreetAsia’s PE-VC Summit last month, Grab president Ming Maa emphasised the importance of partnerships for Grab.
Grab has been ramping up strategic partnerships with players in areas ranging from payments to healthcare.
The Southeast Asian unicorn sees itself as being able to bridge the online-offline gap through its network of drivers and consumers across Southeast Asia. Grab is currently present in 235 cities across eight countries, also tapping on its digital wallet, GrabPay, to fuel transactions.
Some of these strategic partnerships also involve taking minority stakes through its newly-formed venture arm, Grab Ventures.
Last month, Grab Ventures confirmed that it took a minority stake in HappyFresh as part of its foray into grocery delivery, a new vertical for Grab.
Potential collaborations for Microsoft and Grab
- New AI-based authentication mechanisms for drivers and customers
- Data analytics and fraud detection services
- AI chatbot for Grab customers
- “Recommendation engines” for personalised services
- Image recognition and computer vision technology: For example, passengers will be able to take a photo of their current location and have it translated into an actual address for the driver.
- Microsoft Kaizala: Grab will pilot Microsoft’s Kaizala, a mobile app and service for large group communications and work management, for use in its Customer Service teams.
- In-car entertainment and productivity solutions
- Rewards integration
