Thailand’s retail conglomerate Central Group on Thursday officially announced it has acquired a significant non-controlling stake in Grab’s Thai entity for $200 million.
As part of the strategic partnership, Central is investing in Grab’s local business and not at the holding company level. This investment is, therefore, not part of Grab’s ongoing Series H round, for which it is seeking to raise $5 billion. Of this, it secured $3 billion last year from investors including Toyota, Hyundai, Microsoft and others.
Grab has previously received $50 million from Thailand’s KasikornBank at the entity level.
“Our main objective for investing in Grab Thailand is to create the digital platform for Thai people. We would have invested in Grab holding company if we focused more on return on investment,” said Central Group’s president Yol Phokasub.
As part of the agreement, both firms will collaborate on retail and services front. Central Group will help Grab accelerate its growth across multiple verticals including food delivery, parcel delivery and ride-hailing services while Grab will enable the retailer to grow its online traffic.
Tos Chirathivate, executive chairman and CEO of Central Group, said, “Since our establishment 70 years ago, we have built and strengthened our offline platforms across the country so that our customers can access one of them in 30 minutes. But with the capacity of Grab, which is the regional tech company, we aim to build the online platform and make sure that our services can reach and serve our customers wherever they are in 30 minutes. It is important to build two-way services in this era.”
Grab set up operations in Thailand back in 2013 when it was known as MyTeksi. Over the past six years, it has aggressively expanded its operations and offered more services in Thailand from ride-hailing to food and parcel delivery, grocery delivery and digital payments.
“By partnering with Central, which has the largest footprint of malls and hotels in Thailand, we will help their customers and merchants move from the offline world to online via our platform. We will grow our local services ever further, bringing more Thai-loved merchants and brands onto our Grab platform, and helping cement our position as Thailand’s Everyday Super App,” said Grab Group CEO and co-founder Anthony Tan.
Prior to Grab, Central formed a joint venture firm with Chinese e-commerce giant JD.com to grow its e-commerce business to the regional level.
Meanwhile, Grab now faces competition from Indonesia-based rival Go-Jek, which launched its operations including ride-hailing and food delivery in Bangkok last month.
Grab currently offers services in Singapore, Malaysia, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar and Cambodia. It claims to have crossed 3 billion rides in January after hitting its 2 billion rides six months ago.