Yesterday, the news of Grab gaining US$2 billion by Didi Chuxing and Softbank for their recent financing round made headlines all around the region’s tech scene.
Grab is expecting to bring in another US$500 million to cap off at US$2.5 billion for this round of investments, and they seem to be on the right track so far.
In an article published on Recode, it states that “the company’s valuation would top US$$6 billion, according to a source familiar with Grab’s fundraising.”
This investment round has doubled Grab’s approximate value of US$3 Bil as of September 2016.
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But Didi Chuxing, a ride-hailing firm from China (that recently got invested in by Apple) and Japan’s Softbank have a history of staking their money into transportation-service companies, both having stakes in ride-sharing Ola of India, and 99 of Brazil.
Their collective joint force has helped to benefit what a Grab spokesperson is calling the “largest round of financing in the history of Southeast Asia.”
This stake into Grab will be one more step into ride-hailing Didi Chuxing’s bid to a global mobility ecosystem.
With big money coming their way, Grab has announced that they’re looking into investing that wealth into GrabPay, their in-app payment solution.
“With [Didi and SoftBank’s] support, Grab will achieve an unassailable market lead in ridesharing, and build on this to make GrabPay the payment solution of choice for Southeast Asia,” said Anthony Tan, group chief executive officer and co-founder of Grab, in a press release.
We caught up with Grab after their big news with a question in mind—how will these investments impact the Malaysian ride-sharing scene, specifically?
1. Expanding Into More Cities
Grab has expanded into 20 cities since February this year. This brings them to a presence in 25 cities in Malaysia.
The company has hit many of the major tourist cities such as Langkawi, Ipoh, Kuching, KK and Kuantan. Now, they’ll be looking at growing into even more cities and expanding their sizeable driver network across more areas.
It’s a bit of a matter of pride for them too.
As they explained, “The expansion is also part of Grab’s mission to not only be the leading ride hailing service in the region, but also in their own home-ground.”
2. Providing More Employment Opportunities
As part of the aforementioned expansion of their driver network, Grab is looking employ more drivers.
“According to several articles/reports by Bank Negara, Ministry of Higher Education and the Labour Department, while the unemployment rate in Malaysia hasn’t changed significantly, it’s apparent that youths are finding it hard to enter the job market with a number of factories closing between 2016–2017,” said a Grab spokesperson.
So with that in mind, having gigs like Grab to either tide them over or pivot into is a viable source of income for these individuals.
Even our Prime Minister famously called for those with lower income to become ride-sharing taxi drivers, so Grab’s plans will probably be received well.
3. Lowering Costs For Drivers
As one of SEA’s unicorns, this fast-paced organisation is not without its growing pains, over the years.
Sometimes, in their bid to create a competitive service that their customers would enjoy, Grab is placed at odds with their drivers, whose interests—while moving in the same direction with Grab—may not always be congruent.
In light of this, Grab has been working on partnerships behind the scenes to help their foot-soldiers—the drivers—and arguably their bread and butter.
A Grab spokesperson informed us that, “Grab’s partnership with Petronas enables drivers to earn points while pumping petrol while the partnership with Perodua enables those who are keen to drive for Grab purchase Perodua cars at a more affordable price.”
“In addition, Grab also introduced the GrabAllStars programme, which is a loyalty programme for drivers with special vouchers. Grab also provides drivers with the opportunity to earn additional income through on and in-car advertising opportunities.”
The team is riding high on this news of their investment and the spokesperson added, “It demonstrates the confidence of our investors—Didi and SoftBank recognise that Grab will be the clear winner in SEA.”
“Both companies have a track record of backing winners, and we are encouraged that they are doubling down on their commitment to Grab.”
Grab is also going to continue to be on the look-out for strategic investment opportunities in companies in the region who “have great technology and who share our vision to move SEA forward”.
In their words, “Everyone at Grab is extremely confident that the company will be able to win in SEA and excited about the growth prospect of the platform and what the team will be able to achieve.”
Feature Image Credit: yourstory.com