Grab Secures Debt Financing Up to $700M

The Southeast Asia’s leading ride-hailing and mobile payments company, Grab, announced on Friday that it has acquired $700 million worth of debt financing line from unnamed global and regional banks to establish and further expand its car rental program to be the largest one in Southeast Asia by the fourth quarter of 2018.

The Singapore-based on-demand transportation company and Uber’s main rival in Southeast Asia, Grab, also said it would use the funds to provide more appealing rental terms and services for driver partners and increase the supply of vehicles on the road.

The debt financing, which is considered the largest ever raised by a Southeast Asian startup, comes along with Grab’s exclusive partnership with SMRT, Singapore’s multi-modal and transport provider to build the largest fleet in Singapore, Grab said in a statement.

The fleet includes eco-friendly hybrid and fully electric vehicles for an improved driving experience and to help limit drivers’ operating costs. It will translate into higher driver earnings and more affordable rides for passengers. Moreover, the company will also have an exclusive access to SMRT’s current and future fleet of taxis and private car fleet management capabilities, in addition to its entire network of taxis and Strides private–hire cars.

SMRT is a public transport operator whose services include trains and buses. It has a fleet of more than 3,300 taxis.

“This record-breaking debt financing round clearly demonstrates high confidence in our business model and market leadership from several of the world’s leading banks,” Ming Maa, Grab’s President, said in a statement.

The latest funding also comes less than 10 months after the whopping funding round of the company in July where Chinese ride-hailing app, Didi Chuxing, and Japanese giant tech investor, Softbank Group, invest $2 billion in the startup, with an extra $500 million which is expected to be invested soon. A few months earlier, it had secured $750 million in an oversubscribed round led by Softbank. It had also received funding last year from Honda Motor, which invested to help Grab widen its motorbike-hailing operations in Southeast Asia.

Competition in new transport markets is tough, particularly between Grab and U.S. giant Uber Technologies. Grab leveled up its expansion in August when it announced plans to invest $100 million in Myanmar over the next three years.

Grab offers private car, motorbike, taxi, and carpooling services and operates in 132 cities across seven countries. It says it controls 95% of third-party taxi-hailing services in and 72% in private vehicle hailing, with more than 63 million app downloads and over 1.8 million drivers. It also offers a mobile payment platform called GrabPay.

In Indonesia, Grab’s network of 500,000 agents is helping the unbanked and underbanked to use GrabPay’s platform to participate in the digital revolution.

According to a research company, Grab is the market dominant in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.

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