Payments processor PayPal is in advanced talks to join ride-hailing and payments unicorn Grab’s ongoing $3-billion Series H funding round, according to sources aware of the development.
The quantum of investment to be made by PayPal is not clear. However, its participation in the discussions has sparked interest among other potential investors. If these discussions go through, the funding round may end up topping $3.2 billion by the end of this year, said an executive aware of the fundraising discussions.
PayPal did not respond to a request for comment. Grab, meanwhile, declined to comment for this story.
PayPal had in May announced a partnership with Indonesia-based venture capital firm Alpha JWC to back fintech startups in Southeast Asia. Earlier this year, the US company had joined Singapore’s Temasek to invest $125 million in Indian payments startup Pine Labs. Its other portfolio companies include fintech startup Dosh, fraud prevention firm Arkose Labs and European banking app Monese.
Grab, meanwhile, is seeking to round off a year of aggressive fundraising. Grab president Ming Maa first revealed Grab’s $3-billion fundraising target in September, after pocketing $2 billion from investors like Toyota and OppenheimerFunds.
Since then, the Singapore-headquartered company has secured investments from Microsoft, Booking Holdings, Hyundai Motor, Kasikorn Bank and United Overseas Bank (UOB). According to DEALSTREETASIA‘s calculations, the total amount raised so far is about $2.75 billion. Grab is also reported to be valued at $11 billion, making it Southeast Asia’s first decacorn.
The latest investors on Grab’s cap table bring new and diverse “value-add” to its business.
Since Grab’s acquisition of rival Uber’s Southeast Asia operations earlier this year, the Southeast Asian firm has been actively growing its presence in new verticals beyond its core business of ride-hailing. This includes areas such as food delivery, payments, logistics, news content and online healthcare.
Its latest list of investors either serve to strengthen existing areas such as payments (Kasikorn Bank, UOB), increase new “consumer touch-points” such as travel (Booking Holdings), or invest in long-term urbanisation trends such as electric vehicles, big data and AI (Microsoft, Hyundai).
Grab has also been forging new alliances to strengthen its position in areas such as financial services. In October, it announced a partnership with MasterCard to introduce physical and virtual prepaid cards in the region.
In June, Grab also launched Grab Ventures and Grab Velocity, its venture building and accelerator arms. These units create a system that grants Grab access to new verticals via strategic partnerships and investments.
Last week, Grab unveiled the first batch of its Grab Velocity programme, comprising five startups in sectors that it has yet to penetrate, including entertainment, education and home improvement.
Grab wants to be the everyday “super-app” for Southeast Asia, a concept that its rival, Go-Jek, first championed.
During DEALSTREETASIA’s PE-VC Summit in September, Ming Maa acknowledged that imitation isn’t just the best form of flattery. Imitation is everyone’s game.
“I think, to be honest, Uber was first in the market and we imitated a lot of Uber’s services, just like how Alibaba imitated Amazon,” said Maa. “I think the key is not imitation, but how do you make it relevant and right for your customers.”
Rival Go-Jek has also been reported to be in fundraising talks with the likes of Google, Tencent and JD.com to raise $1.5-2 billion. The financing is expected to catapult its valuation to $9-10 billion, this portal had earlier reported.