Uber rival Grab to raise $2.5 billion

Southeast Asian ride-hailing company Grab said it expects to raise about $2.5 billion in fresh funds from China's Didi Chuxing, Japan's Softbank Group (9984.T-JP) and others to bolster dominance in the region and grow its fledging mobile payments business.

Didi Chuxing, the Chinese ride-hailing platform that has triumphed over Uber in the mainland market, and SoftBank will invest up to $2 billion to lead the current financing round, Grab said in a statement on Monday.

Grab anticipates raising an additional $500 million, which would bring the total to about $2.5 billion. It said this was the largest single financing in Southeast Asia. Grab did not disclose valuation, but Reuters cited a source close to the company and said it will be valued at more than $6 billion at the close of the round.

"We're encouraged that these two visionary companies share our optimism for the future of Southeast Asia and its on-demand transportation and payments markets," Anthony Tan, group CEO and co-founder of Grab, said in a prepared statement about the investment from Didi and SoftBank.

"With their 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," Tan added.

The company said it currently holds 95 percent market share in southeast Asia for third-party taxi-hailing and 71 percent in private vehicle hailing, with nearly 3 million daily rides. Grab provides private car, motorbike, taxi and carpooling services in 65 cities across Singapore, Indonesia, Philippines, Malaysia, Thailand, Vietnam and Myanmar.

Grab's latest fundraising round comes at a time when U.S.-based Uber is struggling from myriad issues: Those include an intellectual property fight with Waymo, Google's self-driving car program, scrutiny into its workplace culture, a criminal probe over a software that helped drivers evade local transportation regulators and the search for a replacement for former CEO Travis Kalanick.

Besides Uber, Grab also competes with hailing start-up Go-Jek, reportedly valued at $3 billion, in Indonesia.

Source: AFP