Grab raised US$2 billion (S$2.7 billion) from Didi Chuxing and SoftBank Group in the largest venture- fund raising in South-east Asia, joining forces with two companies instrumental in driving Uber Technologies out of China.
The deal cements an alliance between SoftBank, Didi and Grab, which competes against Uber in markets from Malaysia to Thailand.
The Singapore-based ride-hailing company said yesterday that it expects to get another US$500 million from unspecified new and existing backers. That would take its valuation north of US$6 billion, making it the most valuable start-up in South-east Asia, a person familiar with the matter said.
The record financing follows Uber's retreat from Russia and China, massive markets where Uber spent billions but ultimately capitulated to well-financed and savvy local rivals.
In South-east Asia, it is waging a costly war against not just Grab, but also Go-Jek, which is holding its own on its home turf of Indonesia. The local players have thus far shown greater initiative in terms of launching services such as digital payments, said Mr Ajay Sunder, vice-president of digital transformation at Frost & Sullivan in Singapore. "Grab has been a lot more aggressive than Uber, making new acquisitions and launching new services in the region. Uber will have to make a call at some stage," he said.
SoftBank has been the primary financier of the battle against Uber in Asia, first putting US$5 billion in Chinese ride-hailing firm Didi alongside an early investment in Grab and India's Ola.
The Grab round is one of its largest investments in the region, coming on the heels of the establishment of its mega Vision Fund. It is a vote of confidence from a company that backed Alibaba Group Holding's battle in China against first eBay, and then Amazon.com.
Grab's relationship with the Japanese firm has blossomed since co-founder Anthony Tan first met SoftBank chairman Masayoshi Son in 2014. The two sealed a deal then with a handshake, and SoftBank has backed every funding round since.
"Grab is using technology to address transportation and payments, some of the biggest challenges present in South-east Asia," Mr Son said in a statement.
Asia's largest ride-hailing firms are arming themselves for war with Uber, now that the cessation of activities in China and Russia allows it to focus on other fledgling markets.
South-east Asia - on the cusp of an Internet commerce boom - remains a wide-open field that could prove pivotal if Uber is to sustain growth beyond the US and Europe.
When it closes, the current investment in Grab will eclipse a previous regional record of US$750 million set last September, in a round said to have given it a valuation of more than US$3 billion.
Yesterday, Grab said it has 95 per cent of third-party taxi-hailing in South-east Asia and handles 71 per cent of private vehicle hailing, and has almost three million daily rides.