Southeast Asia’s ride hailing company, Grab expects to raise $2.5 billion in a fresh funds round that will help it extend its lead over rival Uber Technologies Inc.
Grab’s existing investors, China’s Didi Chuxing and Japan’s Softbank will together contribute up to $2 billion to lead the current financing round, it said in a statement.
Grab expects to raise an additional $500 million from other investors as a part of this round. It said that this would be the largest-ever single financing in Southeast Asia. Reuters citing a source close to the company said that the start-up will be valued at $6 billion at the close of this round.
“We are delighted to deepen our strategic partnership with Didi and SoftBank. We’re encouraged that these two visionary companies share our optimism for the future of Southeast Asia and its on-demand transportation and payments markets, and recognize that Grab is ideally positioned to capitalize on the massive market opportunities,” Anthony Tan, group CEO and co-founder of Grab, said in a statement
“With their support Grab will achieve an unassailable market lead in ridesharing, and build on this to make GrabPay the payment solution of choice for Southeast Asia,” Tan added.
The company currently operates in 65 cities across 7 countries with 1.1 million drivers. Grab said that it has a Southeast Asia’s market share of 95% for third party taxi hailing and 71% in private vehicle hailing with nearly 3 million rides daily.
The fresh round of funding of Grab comes at a time when rival Uber is struggling with various issues including accusations of a sexist culture, intellectual property fight with Waymo, Google’s self-driving car program and a federal inquiry into a software that helped drivers avoid police.
Besides Uber, Grab also competes against rival Go-Jek, an Indonesian ride hailing start up currently valued at $3 billion.