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Grab, an Uber Rival in Southeast Asia, Is Set to Raise $1 Billion
2016-08-03 08:27:15
dawei
(2016-08-03 08:28:11) dawei  As Uber Technologies Inc. turns away from China, a key competitor is raising funds to cement its dominance in Southeast Asia and fend off the San Francisco-based tech titan.

Uber’s decision to sell its China business to Didi Chuxing Technology Co. is giving Singapore-based Grab renewed confidence it can take on Uber and win on its home turf. Grab says it has captured much of Southeast Asia’s ride-hailing market with more than half of private car rides in the region.

Valued at $1.6 billion in its previous funding round, Grab is planning to raise around $1 billion in fresh capital from investors including Didi and Japan’s SoftBank Group Corp.,a person familiar with the situation said Wednesday. The first chunk of that fundraising, a $600 million dose, is expected to be completed this week, the person said.

Uber “lost once, and we will make them lose again,” Grab Chief Executive Anthony Tan wrote in an email to employees this week. “Didi’s success reinforces what we have believed all along,” that local players can beat Uber in their own backyard, he wrote.

The fresh injection of funds could help Harvard-educated Mr. Tan, 34, turn Grab into a broader platform, not just for rides, but also for mobile payments and delivery.


A Grab spokeswoman declined to comment on the fundraising.

The stakes are high for Grab and Uber in Southeast Asia. The ride-hailing market there is forecast to grow more than five times to $13.1 billion by 2025 from $2.5 billion last year, according to a recent report from Alphabet Inc.’s Google and Singapore state-investment firm Temasek Holdings.

Grab, which launched in 2012 and offers private-cars, taxi and motorcycle rides, operates in 30 Southeast Asian cities across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Mr. Tan has said his firm is profitable in some cities. The company currently has around $400 million in cash on its balance sheet before the new fundraising, according to the person familiar with the situation.
“With the deal in China, we expect Uber to turn more attention and divert resources to our region,” Mr. Tan said in his email, which was reviewed by The Wall Street Journal.

Indeed, the San Francisco ride-hailing giant is already planning new efforts as it turns away from China.

The deal with Didi frees “substantial resources for bold initiatives,” said Uber Chief Executive Travis Kalanick in a statement this week, citing its efforts in self-driving technology, food delivery, and logistics.

As many as 150 engineers based in San Francisco who have been dedicated to China will now begin working on new products for markets like those in Southeast Asia, according to an Uber official.

In India, where Uber competes with ANI Technologies Pvt’s Ola, the U.S. company will now hire more local engineers, the official said. Uber wants to boost its mapping capabilities for India and other high-growth markets, said the official.

Uber operates in 27 Indian cities, providing private-car and motorbike rides. Last year the company said it would invest $1 billion in the country.

READ FULL STORY http://www.wsj.com/articles/uber-rival-grab-set-to-raise-1-billion-1470212430

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