SoftBank, Didi Hand $2 Billion to Uber's Biggest Asian Rival

SoftBank, Didi Hand $2 Billion to Uber's Biggest Asian Rival

Grab expects $500 million more to set record regional funding
Grab is said to be valued at $6 billion when round closes

By Yoolim Lee July 23, 2017, 8:00 PM PDT July 23, 2017, 9:03 PM PDT

Grab raised $2 billion from Didi Chuxing and SoftBank Group Corp. in the largest–ever venture fundraising in Southeast Asia, as it joins forces with the Chinese company that drove Uber Technologies Inc. out of China.

The deal cements a loose alliance between Didi and Grab, which competes against Uber in markets from Malaysia to Thailand. The Singapore-based ride hailing company said Monday it expects to close another $500 million from unspecified new and existing backers. That will take its valuation north of $6 billion, making it the most valuable startup in Southeast 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 Southeast Asia, it’s waging a costly war against not just Grab but also Go-Jek, which is holding its own on its home turf of Indonesia.

SoftBank has been the primary financier of the battle against Uber in Asia, first putting $5 billion in Didi before an 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 $93 billion Vision Fund.

“Grab is using technology to address transportation and payments, some of the biggest challenges present in Southeast Asia,” SoftBank Chairman Masayoshi Son said in a statement.

Asia’s largest ride-hailing services 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 around the world. Southeast Asia -- a region on the cusp of an internet commerce boom with twice as many people as the U.S. -- remains a wide-open field that could prove pivotal if Uber is to sustain growth beyond the U.S. and Europe.

When it closes, the current investment in Grab will eclipse a previous regional record of $750 million set in September, in a round said to have given it a valuation of more than $3 billion. Go-Jek, better known for its motorcycle taxis, raised $550 million in a 2016 round led by KKR & Co. and Warburg Pincus LLC. On Monday however, Grab said it has 95 percent of third-party taxi-hailing in Southeast Asia and handles 71 percent of private vehicle hailing, and has almost 3 million daily rides.

For its part, Uber is now grappling with a litany of issues back home, including a string of scandals revolving around gender discrimination and the departures of senior people from former Chief Executive Officer Travis Kalanick on down. Its shareholders and board, led by early backer Benchmark, have discussed selling some of their shares to SoftBank and other potential investors, people familiar with the matter have said.


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