In Southeast Asia, the most recent buzzwords in the tech startup ecosystem are “decacorn” and “super app,” and the common denominator here is the Singapore-based ride-hailing app Grab. Recently graduating from the unicorn status to become Southeast Asia’s first decacorn, Grab is riding the tech wave.
Inspired by Tencent’s WeChat in China and in the pursuit of its cutthroat rivalry with Indonesia-grown Go-Jek, Grab’s ambitions didn’t stop with being a leading player in the shared transport space. In the pursuit of becoming Southeast Asia’s first super app, Grab has taken strides to expand into food delivery, digital ads and online payments among other services.
The ride-hailing startup recently secured funds worth USD 1.46 billion (SGD 2 billion) from SoftBank Vision Fund, in its ongoing Series H funding round. This brings the total amount raised in the round to over US$4.5 billion.
Following the fundraiser, Grab has unveiled its Trip Planner Service, which will allow users to find the fastest as well as most affordable route using public transport as well as Grab services. Other initiatives in the pipeline include developing GrabChat and setting up a GrabFood Kitchen. Grab is also using AI to leverage its data, which is one of the largest data sets of Southeast Asia, to improve and develop new services, as well as to solve challenges like financial inclusion and congestion.
The Grab Financial Group and its impact on the Fintech market
Recently, Grab announced that with Grab Financial, they seek to become the region’s biggest financial service provider—an insurtech policy provider and fintech lender. From services like credits, loans and insurance, Grab is willing to bring every possible finance service under one integrated platform.
Grab also launched the “Grow with Grab” roadmap recently, which aims to provide the most comprehensive portfolio of financial services in the region for SMEs and micro-entrepreneurs. The roadmap includes post-paid and installment payment services, micro-insurance products, and “Pay with GrabPay”—an online check-out payment method for online sellers. As the first fintech platform in the region with access to e-money licenses, Grab Financial has managed to build the largest network, covering over 600,000 merchants.
With Grab Financial making these strides in a relatively fresh and ripe fintech industry in Southeast Asia, the question that everyone is asking is, “Are banks the next taxis?” Having experienced the impact of Grab’s monopoly in the ride-hailing market first hand, consumers can only imagine the impact of the decacorn’s monopoly in other sectors, let alone financial services. Industry players have been saying this in interviews that Grab Financial will impact and might disrupt the banking sector in the region. It is equally alarming for consumers if Grab Financial does become what it seeks and ends up being the only big player in the fintech and insurtech industries.
The six-year-old startup is inspired to replicate China’s WeChat that lets roughly a billion people order food, hail taxis and make payments. Following in its footsteps may be difficult given Grab lacks the enormous user base that WeChat has access to, yet Grab has seen initial success in its endeavors like GrabPay and GrabFood so far.
However, this raises some uncomfortable questions about what lies next for the company and how does it impact the consumers. After Grab’s acquisition of Uber in the region, there was a considerable alarm over its potential monopoly in the market. The acquisition even incurred fines worth SGD 13 million from the Competition and Consumer Commission of Singapore (CCCS). No doubt the company’s plans for rapid proliferation of services under one umbrella may have huge implications for consumers and they may be suitably worried.
While Grab is leaving no stone unturned to become the region’s first ever super app, its implications could be either be a positive thing for consumers with the company announcing rewards and waivers to attract a larger customer base or it could disrupt the market in the region with all the power going into the hands of one tech giant. We would have to wait and watch to see how things pan out and what changes the market goes through.
This piece first appeared on Tech Collective.