Grab raises US$850 mil to expand into financial services
SINGAPORE: Grab, Southeast Asia’s most valuable startup, raised more than US$850 million from Japan’s Mitsubishi UFJ Financial Group Inc and TIS Inc to bankroll its expansion into financial services in the region.
The sum includes US$706 million from MUFG, Japan’s largest bank, and US$150 million from TIS, a provider of data centre and cloud services, according to joint statements from the companies.
Backed by SoftBank Group Corp, Grab has been expanding into financial services, building on its ride-hailing, food delivery and e-wallet offerings in an effort to become a one-stop shop for on-demand services in Southeast Asia.
Tie-ups between tech startups and banks are becoming more common in the region, where widespread smartphone use promises greater access to clients who have traditionally been neglected by the financial system.
Grab will co-develop financial products and solutions with the two investors, President Ming Maa said in a statement. The investments demonstrate “their confidence in Grab’s super-app strategy and our ability to build a sustainable long-term business,” he said.
For Tokyo-based MUFG, the alliance will deepen its expansion in Southeast Asia, where it has been buying large stakes in banks to make up for weak growth opportunities at home.
The lender’s biggest investment in a tech startup also reflects its digital push under Hironori Kamezawa, who is set to become chief executive officer in April.
“We are excited to be able to provide customers with next-generation financial services by combining Grab’s advanced technologies and data management expertise with our financial knowledge and know-how,” Kamezawa, who is currently chief digital transformation officer, said in the statement.
Grab will give “first-choice bank” status to MUFG and its Southeast Asian units, including PT Bank Danamon Indonesia and Bangkok-based Bank of Ayudhya Pcl.
While the startup doesn’t disclose its number of users, it says its app has been downloaded onto more than 166 million mobile devices in the region.
Under Grab’s deal with Tokyo-based TIS, the companies will work together on digital payments infrastructure in Southeast Asia and Japan to enable better adoption of cashless options, the firms said in a separate statement.