Grab eyes another $2.7b in funding for regional expansion

Grab chief executive Anthony Tan says the ride-hailing giant aims to raise a total of US$6.5 billion (S$8.8 billion) this year and plans to invest in Indonesia to take on rival Gojek. Grab is backed by big names such as SoftBank, which Mr Tan says ha
Grab chief executive Anthony Tan says the ride-hailing giant aims to raise a total of US$6.5 billion (S$8.8 billion) this year and plans to invest in Indonesia to take on rival Gojek. Grab is backed by big names such as SoftBank, which Mr Tan says has promised its "unlimited support".ST FILE PHOTO
Grab chief executive Anthony Tan says the ride-hailing giant aims to raise a total of US$6.5 billion (S$8.8 billion) this year and plans to invest in Indonesia to take on rival Gojek. Grab is backed by big names such as SoftBank, which Mr Tan says ha
Grab chief executive Anthony Tan says the ride-hailing giant aims to raise a total of US$6.5 billion (S$8.8 billion) this year and plans to invest in Indonesia to take on rival Gojek. Grab is backed by big names such as SoftBank, which Mr Tan says has promised its "unlimited support".ST FILE PHOTO

Grab aims to raise another US$2 billion (S$2.7 billion) this year as it ramps up expansion, its chief executive said, just weeks after announcing more than US$4.5 billion of funding in what has become South-east Asia's largest round of private financing.

"We expect to raise US$6.5 billion of total capital this year," Mr Anthony Tan said in an interview yesterday, during which he also laid out Grab's strategy to become an app-for-everything in South-east Asia - home to about 650 million people.

Grab later said in a statement that it expects to invest a significant portion of the funds in Indonesia.

"We basically received a very strong vote of confidence. And Masa shared that SoftBank is very happy with Grab and that SoftBank will provide unlimited support to power our growth," said Mr Tan, referring to SoftBank Group founder and chief executive Masayoshi Son.

SoftBank did not immediately respond to a request for comment.

The funding will be raised from strategic investors as a mix of debt and equity, said Mr Tan.

Grab's massive financing round started shortly after the firm bought the South-east Asian operations of United States peer Uber Technologies in March last year.

Singapore-headquartered Grab is expanding aggressively in Indonesia, home of rival Gojek. Both are raising billions of dollars to bring ride-hailing, food delivery, e-commerce and banking to a populous region with a growing number of consumers that use smartphones to commute, shop and make payments.

Both Grab and Gojek started out in ride-hailing and have since amassed millions of users with their cut-rate prices. Gojek's backers include investment company Temasek, as well as Tencent Holdings and Google.

Last month, Grab's president Ming Maa - a former SoftBank executive - said Grab was considering raising more funds in the ongoing financing round, in which the SoftBank Vision Fund has already invested US$1.5 billion.

"We have done a lot with SoftBank's portfolio companies, both technical and operational expertise, and of course capital support as well," said Mr Tan.

"That will help us grow very aggressively this year across our verticals - transport, mobility, food and payments," he added, referring to SoftBank's support.

Mr Tan said Grab is looking to make at least six investments or acquisitions this year.

"With the amount of funding we have raised, and the support from strategic investors like SoftBank, we are so well-funded to execute on our expansion and investment plans, so there is really no need to IPO (initial public offering)," said Mr Tan, who co-founded Grab with Harvard classmate Tan Hooi Ling.

Grab's other backers include Toyota Motor, Microsoft and Hyundai Motor. Sources said it has raised about US$8 billion since launching almost seven years ago.

REUTERS

A version of this article appeared in the print edition of The Straits Times on April 09, 2019, with the headline 'Grab eyes another $2.7b in funding for regional expansion'. Print Edition | Subscribe