Toyota invests in Grab to extend its ride-hailing foray

Grab's valuation could exceed US$6 billion (S$8 billion) after the latest round of funding.
Grab's valuation could exceed US$6 billion (S$8 billion) after the latest round of funding.ST PHOTO: DESMOND WEE

TOKYO/SINGAPORE • Toyota Motor Corp is pushing deeper into the ride-sharing business.

Toyota Tsusho Corp, the carmaker's trading arm, will invest an undisclosed amount in Grab, South-east Asia's leading ride-hailing operator.

Toyota Motor said it will work with Grab to provide services in the region, a year after the carmaker bought a small stake in Uber Technologies as it explores new revenue models.

"Through this collaboration with Grab, we would like to explore new ways of delivering secure, convenient and attractive mobility services to our fleet customers in South-east Asia," Mr Shigeki Tomoyama, a senior managing officer at Toyota, said in a statement yesterday.

Car manufacturers are working with and competing against tech companies to figure out how to make money from services to drivers as automation, electrification and on-demand transportation threaten to reshape the current model of individual car ownership.

Honda Motor has also invested in Grab, its first in a ride-sharing company, in a partnership aimed at expanding motorcycle-hailing operations in South-east Asia.

Toyota's investment in Grab will be through the 6 billion yen (S$74 million) Next Technology Fund set up in April by Toyota Tsusho for opportunities in innovative technologies, products and services.

  • $74m 

    Value of Next Technology Fund set up in April by Toyota Tsusho for opportunities in innovative technologies, products and services. Toyota's investment in Grab will be through the fund.

    $3.4b

    Amount Grab is aiming to raise from the latest round of funding, of which it has announced US$2 billion in investment from Didi Chuxing and SoftBank Group.

    1 % 

    Percentage rise in Toyota's shares to 6,151 yen yesterday, the biggest gain in two weeks.

Grab is aiming to raise US$2.5 billion (S$3.4 billion) from the latest round of funding, of which it has previously announced US$2 billion in investment from Didi Chuxing and SoftBank Group. That will take Grab's valuation north of US$6 billion, a person familiar with the matter said last month.

Toyota will record and analyse driving patterns in 100 Grab cars in Singapore, and offer recommendations on what connected services it can provide Grab drivers, the two companies said in separate statements. Grab co-founder and chief executive Anthony Tan said: "We are confident this will benefit our driver partners. We look forward to exploring other ways to collaborate with Toyota in the future."

Toyota's shares climbed 1 per cent to 6,151 yen yesterday, the biggest gain in two weeks.

Carmakers globally are racing to place bets on which firms will emerge as the dominant players in ride-sharing. General Motors has joined forces with Uber and Lyft. Volkswagen has created a mobility services division under the Moia brand and invested US$300 million in ride-hailing provider Gett.

Beyond ride-hailing, Toyota is also collaborating with US car-sharing company Getaround to promote the carmaker's new mobility service platform. It started testing a new suite of car-sharing apps and services this month with Servco Pacific in Honolulu.

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A version of this article appeared in the print edition of The Straits Times on August 31, 2017, with the headline 'Toyota invests in Grab to extend its ride-hailing foray'. Print Edition | Subscribe