Singapore-headquartered on-demand ride provider Grab secured $856m in funding from IT services provider TIS Intec’s TIS subsidiary and financial services firm Mitsubishi UFJ Financial Group (MUFG) today.
MUFG provided $706m for the company while TIS invested $150m. News of the round came as The Information reported that Grab is in talks to merge with Southeast Asia’s other large ride hailing service, Gojek, in a deal that would value the joint company at $23bn.
Grab runs an on-demand transport service spanning 339 cities across eight Southeast Asian countries, offering food and package delivery, as well as payment services, lending, wealth management and insurance through the Grab Financial Group subsidiary it launched in 2018.
As reports last week indicated, MUFG invested as part of a collaboration agreement whereby the companies will work together to develop products intended to boost financial inclusion in the region. Grab is also granting MUFG and its partner banks First Choice Bank status.
TIS will work with Grab on strengthening digital payment infrastructure in both Southeast Asia and TIS’s home country of Japan. It has now raised more than $8.3bn since it was founded as GrabTaxi in 2012.
The company’s most recent funding had been a series H round that stood at $4.8bn before credit rating provider Experian added an undisclosed amount in July 2019 through corporate venture capital vehicle Experian Ventures.
Existing investors in Grab include telecoms firm SoftBank’s Vision Fund and fellow corporate backers Toyota, Hyundai, Kia Motors, Booking Holdings, Ping An Capital, Yamaha, Microsoft, Central Group, Didi Chuxing, Qunar and Tokyo Century.
Mirae Asset – Naver Asia Growth Fund, Kasikornbank, Macquarie Capital, Cinda Sino-Rock Investment Management, All-Stars Investment, Vulcan Capital, Lightspeed Venture Partners, GGV Capital, Tiger Global Management, Vertex Ventures, Hillhouse Capital, China Investment Corporation and Coatue Management are also investors.
Grab president Ming Maa said: “We are excited to work with our partners MUFG and TIS to co-develop financial products and solutions for the region. Ensuring greater access to affordable and accessible financial services and products is key to growing financial inclusion in Southeast Asia.
“The continued support from world-leading investors demonstrates their confidence in Grab’s super app strategy and our ability to build a sustainable long-term business.”
Discussions of a prospective merger between Grab and Gojek have been taking place since November 2019, a source close to both companies told TechCrunch.
Gojek had been targeting a $3bn close for its series F round, which was sized at $1.1bn as of March 2019, but hitherto undisclosed funding talks with SoftBank Vision Fund did not come to fruition, leading to its board of directors favouring a merger deal, the source said.
MUFG subsidiary Mitsubishi UFJ Lease & Finance, Mitsubishi Corporation Mitsubishi Motors – all part of the larger Mitsubishi conglomerate – invested an undisclosed amount in GoJek in July 2019, representing its last disclosed funding.
Mitsubishi, internet group Tencent, e-commerce firm JD.com, internet technology provider Google and conglomerate Astra International had already invested in the round, which boosted Gojek’s overall funding to more than $2bn.
