Toyota Motor Corp is investing $1 billion in Southeast Asia’s ride-hailing major Grab as the lead investor in the latter’s latest financing round, the two companies announced on Wednesday.
“This investment by Toyota is the largest-ever by an automotive manufacturer in the global ride-hailing sector, and brings Grab closer to achieving its vision of becoming a one-stop mobility platform in Southeast Asia,” Grab said in a statement.
It was reported by the Wall Street Journal last month that Grab was seeking to raise $1 billion in funding at a $10-billion valuation. The Singapore-headquartered firm was said to be valued at $6 billion at the time of its $2.5-billion Series G round in July 2017. That round was co-led by Didi Chuxing and SoftBank, and joined by Toyota, which made the investment through its Next Technology Fund, and Hyundai.
The latest funding from Toyota will see the two companies collaborate to accelerate the development of new mobility technologies in the region, according to a statement from the Japanese firm. Potential areas of collaboration include connected services, driving data-based automotive insurance, financial services for Grab drivers and maintenance services.
Following the investment, Toyota will appoint an executive to Grab’s board of directors and another official to Grab’s executive team.
“As a global leader in the automotive industry, Toyota’s investment in Grab is based on their conviction in our leadership in driving the adoption of new mobility solutions and expanding O2O mobile services, such as GrabFood and GrabPay, in the region. Grab is the first Southeast Asian technology startup to have achieved run rate revenues of over US$1 billion across an installed mobile base of over 100 million users,” Grab president Ming Maa said.
Toyota said the funding follows its successful partnership with Grab. Since August 2017, Grab has been collaborating with the automaker in the field of connected car services using Toyota’s Mobility Service Platform (MSPF).
The funding round follows Grab’s acquisition of rival Uber’s Southeast Asia operations in March. The deal included the US ride-hailing giant’s food delivery business in the region and saw Uber pick up a 27.5 per cent stake in the combined entity.
It also comes at a time when Grab’s archrival, Indonesia’s Go-Jek, has announced plans to invest $500 million in its expansion to four new markets outside its home country. Bloomberg earlier reported that Go-Jek backers, including Tencent and Warburg Pincus, have informally discussed extending another $1 billion in funding to ensure a successful overseas expansion for the ride-hailing firm.