Toyota invests $1bn in Grab, Uber's former rival in Southeast Asia
Image credit: Toyota
Japanese car giant Toyota has invested $1bn (£750m) in Grab, the Southeast Asian ride-hailing company that took over Uber's regional operations in March 2018.
The automaker was confirmed as the lead investor in a financing round launched after Grab acquired Uber’s operations in Southeast Asia, a region of 640 million people. Grab called the deal the largest ever investment globally in the ride-hailing sector made by an automotive manufacturer.
Grab, which has its headquarters in Singapore, did not disclose the full amount of capital it hopes to raise from the financing round. Grab previously raised $2.5bn (£1.9bn) in July 2017. At the time, Toyota also bought a stake in the company, despite Grab directly competing with Uber for business in the region and Toyota also having made a previous investment in Uber in May 2016.
In a prepared e-mail statement, Grab said: “We will work with partners like Toyota to continue to transform transportation in Southeast Asia. We want to be the one-stop mobility platform for users.”
Toyota executive Shigeki Tomoyama said, “Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia”.
The value of six-year-old Grab will be just over $10bn (£.7bn) after the investment, said a person familiar with the matter.
Grab said it logs six million rides a day. The firm also offers other services, such as food delivery and digital payments, which it aims to expand further using the funding raised from this latest financing round.
Toyota aims to leverage data collected by Grab and its vehicles, which could help Toyota develop its own next-generation mobility services, including self-driving electric vehicles, as well as offering targetted, tailored financing, insurance and maintenance services to drivers.
The latest Toyota-Grab deal comes at a time when all the major players in the automotive industry are grappling with the fractious issues of traditional car ownership, modern car-sharing and ride-hailing operations, autonomous vehicles, electric and other non-fossil fuel propulsion methods and rapidly developing technological aspects.
A number of key car companies have already invested in, or partnered with, the disruptive creators of ride-hailing apps, which are rapidly dominating the nascent business of mobility services, particularly in urban areas where car ownership is predicted to decline.
Earlier this year, Toyota invested 7.5bn yen (£51m) in JapanTaxi, a ride-hailing app affiliated with Japan's taxi federation. General Motors Co and Jaguar Land Rover have both invested in US ride-hailing service Lyft, whose main rival Uber is backed by Toyota. Volkswagen has invested heavily in Gett. Other Grab investors include Japan’s Honda, South Korea’s Hyundai and Chinese ride-hailing firm Didi Chuxing.
For its part, Uber itself acquired 27.5 per cent of Grab in exchange for the US firm exiting the Southeast Asian region earlier this year. Meanwhile, Japan’s SoftBank Group - already an investor in Grab and Uber - has said that it will invest $2.25bn (£1.68bn) in GM’s autonomous vehicle unit Cruise. A lot of companies are betting big - and wide - on flexible mobility services for the future.
With the exit of Uber from Southeast Asia, Grab’s main rival in the region is now Indonesia’s Go-Jek, which has announced its own intention to invest $500m (£370m) in order to expand operations abroad.