Online taxi firm Grab aims to build its financial services business through its GrabPay app to transform into a consumer technology firm
Singapore: Grab, Uber Technologies Inc.’s biggest ride-hailing competitor in South-east Asia, is likely to kick off a fresh round of fundraising “in the near future” as it seeks to develop offerings such as financial services, its head said on Tuesday.
Building on soaring user numbers of its Grab ride-hailing app and GrabPay function, the five-year-old start-up aims to transform into a consumer technology firm that also offers loans, electronic money transfer and money-market funds.
“These are all things under consideration for sure,” Anthony Tan, Grab’s 35-year-old co-founder and group chief executive officer, said in an interview. “Whether we are to execute any anytime soon, I can’t share that off the top of my head.”
Grab facilitates as many as 2.5 million rides each day, making it the largest ride-hailing platform in South-east Asia with over 930,000 drivers in 55 cities and seven countries. In the past six months alone, daily rides have more than doubled.
It also provides micro finance to help drivers buy phones and has helped two-thirds open their first bank accounts—practices it said it aims to expand as it seeks to broaden its financial services and build a consumer brand.
No need to list
The Singapore-based start-up raised $750 million in a funding round in September, with officials valuing it at over $3 billion. Its current investors include Chinese peer Didi Chuxing, China Investment Corp, Japan’s SoftBank Group Corp. and Vertex Ventures Holdings—a subsidiary of Singapore state investor Temasek Holdings (Pte) Ltd.
“I can’t specifically give a time line but I can imagine somewhere in the near future, there probably could be more money coming in. That’s probably quite likely,” Tan said.
The company is not profitable overall but is profitable in some markets, said Tan, who founded Grab with former McKinsey & Co consultant Tan Hooi Ling when they were at Harvard Business School in the United States.
“We have been very blessed with capital. There is really no need to (list on the stock exchange) this year, next year,” he said.
Tan said Grab is spending less on promotions and incentives for drivers to log more rides, even as competition with Uber increased after the US firm exited China market last year.
“Market share clearly shows that today we have something like 70% across the region,” Tan said, attributing the figure to localising its services and investing in technology.
Grab recently launched JustGrab which pools taxis and private cars together to help passengers book a vehicle quicker. It also offers GrabHitch and GrabShare car-pooling and shuttle services.
Grab bought Indonesian payment service Kudo earlier this year, and Tan said Grab is seeking more acquisitions to support rapid growth.
“You will see more happening across the region with GrabPay. The first big thing was obviously the Kudo acquisition, the second one is building an engineering centre dedicated to payments,” he said. Reuters