Grab, Uber's Southeast Asia Rival, Gets $2.5 Billion In Funding

Ride-hailing services are a strong sector for tech companies in the U.S. and the market is seeing similar performance overseas. Southeast Asia ride-hailing service Grab is in the process of raising $2.5 billion in funding to bolster its services to users, according to Reuters.

The majority of the funding is expected to come from Chinese ride-hailer Didi Chuxing and Softbank — both companies will provide around $2 billion in the funding round. In total, the funding is expected to bring the company’s valuation up to around $6 billion.

Read: Didi Chuxing, Uber-Killer In China, Raises $5.5 Billion

In a statement, Grab CEO Anthony Tan touted that the funding was the biggest single round of investment for a Southeast Asian company and said the extra funds will be used to bolster the company’s properties.

"With their support, Grab will achieve an unassailable market lead in ride-sharing, and build on this to make GrabPay the payment solution of choice for Southeast Asia," Tan said.

Originally launched in 2012, Grab began as an Uber-like ride-hailing service with private cars, motorcycles and taxis for the Southeast Asia region. The Singapore-based company has grown to other countries in the region including Vietnam, Thailand and Malaysia. Since its launch, Grab says it has a user base of around 1.1 million customers. Within the region, the service also contends it holds a market share of 95 percent among taxi-hailing users and 71 percent among private car requests.

In a statement, Didi Chuxing CEO Cheng Wei said it made sense for the two companies to partner together thanks to their local roots and interest in the Asia market.

“Starting with transport, Grab is establishing a clear leadership in Southeast Asia’s internet economy based on its market position, superior technology, and truly local insight,” Wei said. “By deepening our strategic partnership, DiDi and Grab reaffirm our shared commitment to innovating localized solutions to global urban development challenges from the world’s fastest growing marketplaces.”

Grab has also expressed interest in becoming a payment-processing service. As Reuters noted, Grab previously bought Indonesian payment service Kudo earlier this year. The company launched its GrabPay service late last year.

Read: Grab, Uber Rival In Southeast Asia, To Provide Insurance

As with comparable U.S. companies like Uber and Lyft, Grab has experienced its share of growing pains on its way to being a major player in the Southeastern Asia market. Last year, Indonesian officials asked companies like Grab to have cars registered with primary transportation businesses in the country. Grab also started offering insurance to drivers and passengers around the same time period.

Among U.S.-based companies, Uber and Lyft have maintained modest overseas presences, but they’ve largely been also-rans to well-established local competitors. Uber had previously attempted to make inroads into the Chinese market, but sold off its local operations to Didi Chuxing last year for around $1 billion.