Uber rival Grab looks to raise $2.5bn

South East Asian firm may be valued at more than $6bn at the close of this round

FILE PHOTO - People wait for the start of ride-hailing company Grab's fifth anniversary news conference in Singapore June 6, 2017. REUTERS/Edgar Su/File Photo
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Grab, Uber Technologies Inc's biggest ride-hailing competitor in South East Asia, said it expects to raise US$2.5 billion in its latest financing round that will help to bolster its leading position in the region and grow its payments platform.

The Chinese peer Didi Chuxing and Japan's SoftBank Group, both of which are existing investors, will invest up to $2bn to lead the current financing round, it said in its statement on Monday.

Grab expects to raise an additional $500 million, bringing the total to $2.5bn in this round, which it said would be the largest-ever single financing in South East Asia.

The firm will be valued at more than $6bn at the close of this round, according to a source close to company.

The Singapore-headquartered company says it has a South East Asia market share of 95 per cent in third-party taxi-hailing and 71 per cent in private vehicle hailing. It operates private car, motorcycle, taxi, and carpooling services across seven countries in the region, with 1.1 million drivers.

"With their [Didi and SoftBank's] 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," said Anthony Tan, the group chief executive officer and co-founder of Grab.

Building on soaring user numbers of its Grab ride-hailing app and GrabPay function, the five-year-old start-up aims to transform into a consumer technology firm that also offers loans, electronic money transfer and money-market funds.

Grab bought the Indonesian payment service Kudo this year, and has said it is seeking more acquisitions to support rapid growth.

Grab competes with the likes of Uber, the world's largest ride-hailing service, and Indonesia's Go-Jek in South East Asia, which is fast becoming a battleground for start-ups vying for the attention of about 600 million people.

Tencent invested around $100m to $150m in Go-Jek, sources said this month.

Grab's fundraising comes at a time when San Francisco-based Uber has been beset by complaints about its workplace culture, a federal inquiry into software to help drivers avoid police, and an intellectual property lawsuit by Waymo, the self-driving car unit of Google parent Alphabet.

Grab's previous investors include the sovereign wealth fund China Investment, the hedge fund Coatue Management, the venture capital firm GGV Capital, and Vertex Ventures Holdings - a subsidiary of Singapore state investor Temasek.