SINGAPORE/TOKYO – Leading Southeast Asian ride-hailing provider Grab raised about $1.5 billion from SoftBank Group Corp.’s Vision Fund, bankrolling its effort to expand into new services across the region.
The funding brings the amount of money the company has collected from investors in the past year to about $4.5 billion, it said. SoftBank is already a major backer of the Singapore-based startup, and the latest investment will boost its stake.
Grab founder Anthony Tan is battling Go-Jek for leadership in the Southeast Asian market after vanquishing Uber Technologies Inc. in the region last year. He plans to spend a significant portion of the latest proceeds in Indonesia, the home turf of Grab’s rival.
Go-Jek has presented the thorniest challenge, with the Jakarta-based startup marching into Grab’s home market of Singapore as well as Vietnam and Thailand. Go-Jek, led by Tan’s Harvard Business School classmate Nadiem Makarim, is also raising additional capital to compete for customers and drivers.
Southeast Asia’s two most valuable startups are aiming to expand swiftly in everything from mobile payments to food delivery. Go-Jek raised over $1 billion in its ongoing funding round from a clutch of internet giants including Google, JD.com Inc. and Tencent Holdings Ltd., it was reported last month. Both companies are using the proceeds to shore up their positions in Indonesia and expand around the region, while merging payments with ride-sharing and food delivery to create so-called super apps.
“It is an incredibly dynamic market where the consumer class is rapidly digitizing. And within this digitization, we see tremendous opportunities to continue growing our super-app platform,” Grab President Ming Maa said in an interview.
Southeast Asia’s best-funded technology startups are raking in billions of dollars of investments. The region’s internet firms raised $9.1 billion from venture capitalists, private equity firms and corporate investors in the first half of last year, headed for an all-time record, a report from Google and Temasek Holdings Pte. shows. The industry raised $9.4 billion in all of 2017, according to the November research.
The region’s ride-hailing market is expected to reach $28 billion by 2025 from an estimated $7.7 billion last year, the report shows, underscoring the ambition of Go-Jek and Grab to become Southeast Asia’s super apps. On Wednesday, Maa said his startup had no plans for an initial public offering at this point but was monitoring the impending debuts of Uber and Lyft Inc.