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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