Startups

Grab gets $2B from Didi and SoftBank to fuel bid to defeat Uber in Southeast Asia

Comment

Grab, the ride-hailing company competing with Uber in Southeast Asia, has pulled in $2 billion of new financing from existing investors Didi Chuxing, the company that defeated Uber in China, and SoftBank.

Didi said the round could expand by $500 million more with input from other existing backers and new investors, too. A Grab representative confirmed that SoftBank’s Vision fund is not part of the current commitment, it is coming from SoftBank Group Corp.

A source confirmed that this new money gives Grab a post-money valuation of more than $6 billion. That’s more than double the $3 billion valuation that Grab commanded from its most recent round of funding in September 2016, when it raised $750 million.

“We are delighted to deepen our strategic partnership with DiDi and SoftBank. We’re encouraged that these two visionary companies share our optimism for the future of Southeast Asia and its on-demand transportation and payments markets, and recognize that Grab is ideally positioned to capitalize on the massive market opportunities,” said Anthony Tan, group CEO and co-founder of Grab.

Essentially, both Didi and SoftBank are doubling down on the belief that Grab has what it takes to defeat Uber in Southeast Asia, the same way that Didi did in China when Uber agreed to sell its local business last August. That hope of defeating the U.S. firm was reignited this month when Uber agreed to sell its business in Russia to local rival Yandex.

“Starting with transport, Grab is establishing a clear leadership in Southeast Asia’s internet economy based on its market position, superior technology, and truly local insight,” Cheng Wei, founder and CEO of Didi, added via a statement that is fairly damning of Uber. (Didi is an investor in Uber by virtue of the China acquisition deal.)

Grab operates in 36 cities across seven countries in Southeast Asia, where it claims over 50 million downloads from users and 1.1 million drivers on its platform. Its services are primarily focused on licensed taxis and private cars, but Grab also offers motorbike taxis, shuttle bus services and carpooling in a selection of countries.

Uber doesn’t reveal public data for its Southeast Asia-based business. But one rival that is upsetting Grab is Go-Jek, a bike and car on-demand platform in Indonesia that is seen widely as the market leader in the country.

On a business-level, Uber began to see profitability in selected markets in Southeast Asia last summer, sources told us at the time, but it increased its investment in the market (and India) following its exit from China, which then-CEO Travis Kalanick revealed was costing the firm $1 billion a year. A Grab spokesperson said the company is profitable “in certain verticals and cities, but we don’t break that down.” Grab did share the results of a study it commissioned which found it owns 95 percent marketshare of licensed taxi e-hailing and 71 percent of private cars across Southeast Asia.

In a bid to take its business to the next level, Grab is also developing a mobile payments platform. That began as a mechanism to accept payment via credit cards, having started out as cash-only, but that focus has also seen Grab develop a fintech push in Indonesia, Southeast Asia’s largest economy and the world’s fourth most populous country.

Indonesia is tipped to account for more than half of the revenue of ride-sharing services across the region by 2025, with the overall industry forecast to $13.1 billion that year up from $2.5 billion in 2015, according to a report co-authored by Google last year. Grab sees a lot of that potential stuck behind the country’s outdated banking system, and it is working on financial inclusion systems to help grow the consumer pie that it serves.

At the start of 2017, Grab announced a $700 million investment program to build its services in Indonesia, of which at least $100 million is dedicated to investments and acquisitions. It didn’t take long to dip into that, with Grab buying offline payment startup Kudo two months later in a deal sources told TechCrunch could be worth as much as $100 million over time.

The fintech play is a move to battle Go-Jek, which began offering payment services before Grab dipped its toes into the market. Sources close to Go-Jek told TechCrunch that the company raised $1.2 billion led by Tencent in May, although it did not confirm that at the time and hasn’t announced the raise. This new capital raise from Grab immediately puts pressure on Go-Jek’s own financial position.

More TechCrunch

Dogs are the most popular pet in the U.S.: 65.1 million households have one, according to the American Pet Products Association. But while cats are not far off, with 46.5…

Cat-sitting startup Meowtel clawed its way to profitability despite trouble raising from dog-focused VCs

Anterior, a company that uses AI to expedite health insurance approval for medical procedures, has raised a $20 million Series A round at a $95 million post-money valuation led by…

Anterior grabs $20M from NEA to expedite health insurance approvals with AI

Welcome back to TechCrunch’s Week in Review — TechCrunch’s newsletter recapping the week’s biggest news. Want it in your inbox every Saturday? Sign up here. There’s more bad news for…

How India’s most valuable startup ended up being worth nothing

If death and taxes are inevitable, why are companies so prepared for taxes, but not for death? “I lost both of my parents in college, and it didn’t initially spark…

Bereave wants employers to suck a little less at navigating death

Google and Microsoft have made their developer conferences a showcase of their generative AI chops, and now all eyes are on next week’s Worldwide Developers Conference, which is expected to…

Apple needs to focus on making AI useful, not flashy

AI systems and large language models need to be trained on massive amounts of data to be accurate but they shouldn’t train on data that they don’t have the rights…

Deal Dive: Human Native AI is building the marketplace for AI training licensing deals

Before Wazer came along, “water jet cutting” and “affordable” didn’t belong in the same sentence. That changed in 2016, when the company launched the world’s first desktop water jet cutter,…

Wazer Pro is making desktop water jetting more affordable

Former Autonomy chief executive Mike Lynch issued a statement Thursday following his acquittal of criminal charges, ending a 13-year legal battle with Hewlett-Packard that became one of Silicon Valley’s biggest…

Autonomy’s Mike Lynch acquitted after US fraud trial brought by HP

Featured Article

What Snowflake isn’t saying about its customer data breaches

As another Snowflake customer confirms a data breach, the cloud data company says its position “remains unchanged.”

2 days ago
What Snowflake isn’t saying about its customer data breaches

Investor demand has been so strong for Rippling’s shares that it is letting former employees particpate in its tender offer. With one exception.

Rippling bans former employees who work at competitors like Deel and Workday from its tender offer stock sale

It turns out the space industry has a lot of ideas on how to improve NASA’s $11 billion, 15-year plan to collect and return samples from Mars. Seven of these…

NASA puts $10M down on Mars sample return proposals from Blue Origin, SpaceX and others

Featured Article

In 2024, many Y Combinator startups only want tiny seed rounds — but there’s a catch

When Bowery Capital general partner Loren Straub started talking to a startup from the latest Y Combinator accelerator batch a few months ago, she thought it was strange that the company didn’t have a lead investor for the round it was raising. Even stranger, the founders didn’t seem to be…

2 days ago
In 2024, many Y Combinator startups only want tiny seed rounds — but there’s a catch

The keynote will be focused on Apple’s software offerings and the developers that power them, including the latest versions of iOS, iPadOS, macOS, tvOS, visionOS and watchOS.

Watch Apple kick off WWDC 2024 right here

Welcome to Startups Weekly — Haje’s weekly recap of everything you can’t miss from the world of startups. Anna will be covering for him this week. Sign up here to…

Startups Weekly: Ups, downs, and silver linings

HSBC and BlackRock estimate that the Indian edtech giant Byju’s, once valued at $22 billion, is now worth nothing.

BlackRock has slashed the value of stake in Byju’s, once worth $22 billion, to zero

Apple is set to board the runaway locomotive that is generative AI at next week’s World Wide Developer Conference. Reports thus far have pointed to a partnership with OpenAI that…

Apple’s generative AI offering might not work with the standard iPhone 15

LinkedIn has confirmed it will no longer allow advertisers to target users based on data gleaned from their participation in LinkedIn Groups. The move comes more than three months after…

LinkedIn to limit targeted ads in EU after complaint over sensitive data use

Founders: Need plans this weekend? What better way to spend your time than applying to this year’s Startup Battlefield 200 at TechCrunch Disrupt. With Monday’s deadline looming, this is a…

Startup Battlefield 200 applications due Monday

The company is in the process of building a gigawatt-scale factory in Kentucky to produce its nickel-hydrogen batteries.

Novel battery manufacturer EnerVenue is raising $515M, per filing

Meta is quietly rolling out a new “Communities” feature on Messenger, the company confirmed to TechCrunch. The feature is designed to help organizations, schools and other private groups communicate in…

Meta quietly rolls out Communities on Messenger

Featured Article

Siri and Google Assistant look to generative AI for a new lease on life

Voice assistants in general are having an existential moment, and generative AI is poised to be the logical successor.

2 days ago
Siri and Google Assistant look to generative AI for a new lease on life

Education software provider PowerSchool is being taken private by investment firm Bain Capital in a $5.6 billion deal.

Bain to take K-12 education software provider PowerSchool private in $5.6B deal

Shopify has acquired Threads.com, the Sequoia-backed Slack alternative, Threads said on its website. The companies didn’t disclose the terms of the deal but said that the Threads.com team will join…

Shopify acquires Threads (no, not that one)

Featured Article

Bangladeshi police agents accused of selling citizens’ personal information on Telegram

Two senior police officials in Bangladesh are accused of collecting and selling citizens’ personal information to criminals on Telegram.

3 days ago
Bangladeshi police agents accused of selling citizens’ personal information on Telegram

Carta, a once-high-flying Silicon Valley startup that loudly backed away from one of its businesses earlier this year, is working on a secondary sale that would value the company at…

Carta’s valuation to be cut by $6.5 billion in upcoming secondary sale

Boeing’s Starliner spacecraft has successfully delivered two astronauts to the International Space Station, a key milestone in the aerospace giant’s quest to certify the capsule for regular crewed missions.  Starliner…

Boeing’s Starliner overcomes leaks and engine trouble to dock with ‘the big city in the sky’

Rivian needs to sell its new revamped vehicles at a profit in order to sustain itself long enough to get to the cheaper mass market R2 SUV on the road.

Rivian’s path to survival is now remarkably clear

Featured Article

What to expect from WWDC 2024: iOS 18, macOS 15 and so much AI

Apple is hoping to make WWDC 2024 memorable as it finally spells out its generative AI plans.

3 days ago
What to expect from WWDC 2024: iOS 18, macOS 15 and so much AI

As WWDC 2024 nears, all sorts of rumors and leaks have emerged about what iOS 18 and its AI-powered apps and features have in store.

What to expect from Apple’s AI-powered iOS 18 at WWDC 2024

Apple’s annual list of what it considers the best and most innovative software available on its platform is turning its attention to the little guy.

Apple’s Design Awards highlight indies and startups