On Tuesday, Singaporean ride-share startup Grab announced it received $850 million in outside funding. The firm will use its latest cash injection to expand its services, which include food delivery and an e-wallet product. Last year, the company received a $14 billion valuation, which Bloomberg states make it Southeast Asia’s most valuable corporation.
Grab $850 Million Investment Details
Grab received its near billion-dollar cash injection from two Japanese firms. First, Mitsubishi UFJ Financial Group (MUFG), which is the largest bank in Japan, put $706 million into the company. Besides, TIS, an information technology services corporation, invested $150 million into the ride-share startup.
The Singaporean concern stated it would team with its new backers to develop financial products and services. Specifically, the three companies intend to share their data to establish a new lending “scoring model.” Grab should be able to provide its partners with a wealth of consumer information as its signature app has been downloaded more than 166 million times. Moreover, the service acquired Uber’s Southeast Asian business back in 2018.
That said, the startup stated users would have to opt in to have their personal information shared.
The Southeast Asian ride-share company will also work with its new affiliates on two other functions. Grab will now use MUFG and its local subsidiaries as its “first choice bank.” As such, the Japanese institution will serve as the default selection for customers who want to use the firm’s in-app financial services. As such, the bank will be able to generate new business abroad to make up for a weakness in its domestic market.
Similarly, the ride-share firm and TIS will work in tandem to build a digital payment feature for the Grab application.
Grab’s Possible Merger with Gojek
Grab securing an $850 million investment isn’t the only big news regarding the tech firm. The Information recently reported the startup is in talks to merge with Gojek, a rival ride-share service based in Indonesia. Like its competitor, the Jakarta centered concern is one of the region’s biggest companies. TechCrunch pegged its value at $9.5 billion last April.
According to The Information, the two Southeast Asian startups are interested in a tie-up to save money. Notably, the two companies have spent years competing for customers in the ride-share and food delivery space. By consolidating, the firms would save money and signal to their investors that they can become profit-generating enterprises.
However, Grab and Gojek have yet to forge an agreement after 3.5 months of negotiation. The two ride-share startups have reportedly clashed over the respective valuations and post-merger control dynamics. In particular, the Indonesian firm isn’t interested in being absorbed by its Singaporean rival.
As of this writing, Gojeck has denied that it has engaged in consolidation talks with Grab. However, the larger ride-share startup has declined to comment on the matter.