SINGAPORE (BLOOMBERG) - Grab, Uber Technologies' biggest rival in Southeast Asia, will acquire Indonesian e-commerce startup Kudo for an undisclosed amount, striking its first deal since pledging to invest US$700 million (S$977.1 million) in its largest market.
The purchase is aimed at beefing up payment services while expanding its reach across Southeast Asia's largest country, Grab said.
Kudo helps consumers without bank accounts to shop online by connecting them with online merchants and other service providers across 500 cities and towns.
SPH Media Fund, the corporate venture capital arm of Singapore Press Holdings, was among the investors who exited from Kudo. SPH Media Fund first invested in the Indonesia-based e-commerce platform in April 2015 and participated in another funding round in December 2015.
Singapore-based ride-hailing firm Grab also announced on Monday (April 3) that it's hiring former Euronet Worldwide Inc. executive Jason Thompson to head GrabPay.
Grab plans to accelerate the expansion of Kudo's network while using Kudo's reach to bring more riders and drivers onto its own platform, it said in a statement. The pair plan to explore new financial services products such as insurance and consumer loans.
Grab, which introduced GrabPay last year, is racing against Indonesian rival Go-Jek to set up digital wallets for riders. It's promised to invest US$700 million in Indonesia over the next four years to build its digital payments network and win over a market of 260 million people.
Indonesia is Grab's largest market, where the company saw its car- and motorcycle-hailing businesses grow more than 600 per cent in 2016. Smartphone and internet penetration is now booming alongside rising incomes and economic growth, igniting competition in ride-hailing.
Grab, which is said to be valued at more than US$3 billion, intends to set aside as much as US$100 million to bankroll early-stage domestic startups in mobile and financial services. It's now establishing research centres in Jakarta, Bangalore and Ho Chi Minh City to complement engineering offices in Singapore, Beijing and Seattle.