Published: Thu, July 27, 2017
Economy | By Melissa Porter

Uber rival Grab to raise $2.5 billion in new financing

Uber rival Grab to raise $2.5 billion in new financing

Didi, the largest cab service in China, and SoftBank are investing $2 billion in the Southeast Asian ride-hailing startup Grab.

The company has steadily fought off competition from Uber in the region and the partnership with DiDi Chuxing is particularly significant, given the Chinese company virtually ended Uber's ambitions in the world's second-largest economy past year.

As with comparable USA companies like Uber and Lyft, Grab has experienced its share of growing pains on its way to being a major player in the Southeastern Asia market. Recently, it channeled a huge chunk of its resources into Southeast Asia's burgeoning tech scene.

Didi and SoftBank are already investors in Grab and other ride-hailing services globally.

Chinese peer Didi Chuxing and Japan's SoftBank Group Corp will contribute most of the money, which a person close to the Singapore-based firm said would value it at $6 billion.

Grab, which operates private auto, taxi, carpool, and motorcycle bookings across seven countries in the region, is aiming to challenge its competitor Uber.

When it comes down to which company commands the most market share in Southeast Asia, a recent study shows Grab with 95 percent in the licensed taxi e-hailing market, while the company holds firm with 71 percent for the private car's market.

Alibaba Group Holding Jack Ma and its Alipay affiliate have looked at investing in Grab, people familiar with the matter have said.

The new fund-raising is a significant jump from the $750 million that Grab raised last fall.

Cheng Wei, founder and CEO of Didi, believes that Grab is establishing leadership in south-east Asia's internet economy based on its market position, technology, and local insight.

The company plans to use its new funding to continue strengthening its dominant position in the region, and it also plans on investing in its mobile payment solution, GrabPay. Grab said it amounts to the largest single financing in Southeast Asia.

Grab acquired Kudo earlier this year, marking its venture to payment solutions.

"We are always on the lookout for strategic investment opportunities in regional companies which have great technology and who share our vision to move Southeast Asia forward".

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