Ride-hailing firm Grab raises $856m to push into financial services
Softbank-backed entity secures funding from Mitsubishi UFJ Financial Group and IT services company TIS
South-East Asia's Grab said Japan's Mitsubishi UFJ Financial Group (MUFG) and IT services company TIS have agreed to invest a combined $856 million (Dh3.1 billion) in the ride-hailing company, as it seeks to expand aggressively into financial services.
MUFG, Japan's biggest bank by assets, has agreed to invest $706m, the companies said in statements on Tuesday.
"MUFG's investment into Grab is a vote of confidence in our super app strategy and our ability to build a long-term, sustainable business," Ming Maa, Grab's president, said on Tuesday.
Singapore's Grab, backed by SoftBank Group's Vision Fund, said it will use the funding to offer lending, insurance and wealth management products and services for South-East Asian consumers and small and medium-sized enterprises.
MUFG's deputy president and incoming chief executive Hironori Kamezawa said the bank will combine Grab's advanced technologies and data management expertise with its financial experience. "We believe that this alliance will also generate additional momentum for our ongoing digital transformation of MUFG," he said.
Separately, Grab also said that TIS, part of TIS Intec Group, is investing $150m in the company.
Given a low interest rate environment at home, Japan's MUFG has focused on boosting its South-East Asian business by acquiring stakes in some of the lenders in the region.
"Japan's progress on the digitialisation of banking and other FinTech lags that of other advanced countries," S&P Global Ratings associate director Shoki Nagano said in a report.
"Banks must make sufficient investments in new technology, establish flexible and adaptive management suitable for fast-changing environments."
Grab and Indonesian rival Go-Jek are evolving from ride-hailing app operators to become one-stop shops for services as varied as payments, lending, food delivery, logistics and hotel bookings in South-East Asia.
In Singapore, Grab has teamed up with Singapore Telecommunications and applied for an online banking licence in the country.
On Monday, technology news website The Information reported that Grab and Gojek are discussing a merger. Gojek said that there are no plans for any sort of merger, while Grab declined to comment.
Updated: February 25, 2020 02:45 PM