Singapore on-demand giant Grab announced Wednesday Toyota Motor Corporation as the lead investor in its ongoing funding round. Toyota will inject USD 1 billion into Grab and both companies look forward to furthering collaborations to drive new mobility solutions across Southeast Asia.
The deal also marks the largest-ever investment by an automotive manufacturer in the global ride-hailing sector, according to the announcement.
Post the deal, Grab will be working with Toyota, leveraging on the latter’s Toyota Mobility Service Platform (TMSP) to enrich Grab drivers’ experience, providing services such as user-based insurance, financing program and predictive maintenance.
It’s noteworthy to mention that Grab has been aggressively pushing beyond its traditional ride-hailing sector very quickly, from its launch of payment services in Singapore and Malaysia, food delivery in Singapore to Grab Ventures and now into mobility solutions.
This could be the ‘first-mover advantage’ the company is looking to leverage on, with the imminent expansion plans of Indonesia-based Go-Jek.
Grab’s Toyota funding announcement came shortly after Indonesian Go-Jek reportedly was offered a war chest of up to 1 billion from existing investors to propel its outbound expansion, as Grab and Go-Jek were perceived to be in an imminent and inevitable competition soon.
Hailing originally as a motorcycle-sharing platform, Go-Jek today has strong backers such as Chinese internet giant, Tencent Holdings Ltd, Chinese lifestyle platform giant, Meituan-Dianping, KKR and DST Global. It has also dominated its domestic market – the largest in Southeast Asia, offering a myriad of lifestyle services as an Indonesian ‘’go-to app’’.
In addition to pledging USD500 million financial commitment for its Southeast Asia expansion goals, more funds were on offer to boost its chances to win the battle for the region.
Unsurprisingly, the Southeast Asia landscape reflects that of China.
Southeast Asia’s tech scene as a mirror image of China
While Grab is now seeking to offer the one-stop mobility platform in Southeast Asia, Chinese ride-hailing giant, Didi Chuxing is also in the midst of bridging the gap in China’s public transport system, aiming to do away with public transport altogether.
And as a matter of fact, Didi has struck a similar deal with traditional carmaker, facilitating tie-ups between the disruptor and old power in a trend slated to change the way people own and use a car.
Additionally, Didi is also locking horns with its local peer Meituan in the same fashion that Grab fights with Go-Jek across Southeast Asia.
For instance, Meituan-Dianping is launching attacks at China’s ride-hailing market, movie ticketing and hotel reservations all at the same time. Meituan has been posing some real threats to Didi on the ride-hailing front.
This is starkly similar to both Grab and Go-Jek’s quick and rapid expansions into payments, delivery and now new mobility solutions.
It remains to be seen if the steaming growth can be sustained by private funds alone even as Meituan-Dianping is on the way with its IPO plans.