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Uber-Killer Grab Prepares for War in Asia by Raising $1.5 Billion

Last Updated September 23, 2020 12:32 PM
Grant Ferowich
Last Updated September 23, 2020 12:32 PM

The cash-grab brings the Singapore tech firm’s valuation up to $14 billion, according to press reports.

Singapore-based ride-hailing firm Grab has packed its war chest with $1.5 billion in fresh equity financing from Soft Bank’s Vision Fund this week.

That’s enough to lift the private firm’s valuation to $14 billion, CNBC reports . Without public data on the firm’s operating revenues and expenses, this estimate remains speculative and should be viewed with some skepticism.

softbank grab
“We have been working alongside Grab for a number of years and are privileged to support the evolution of its user-driven technologies,” Softbank’s David Thevenon said | Source: Shutterstock

Last year, Grab founder Anthony Tan notched a major victory over U.S.A.-based competitor Uber Technologies. Uber surrendered its business operations in Southeast Asia in exchange for a 27.5 percent stake in Grab.

This vindicated Tan’s focus on working with taxi drivers  instead of working against them as Uber has done in its battle against US taxi services.

Grab’s Next Rival: Go-Jek

The move comes as Grab is looking to develop new services in the Southeast Asian market. Tech rival Go-Jek is competing for regional dominance. Like Grab, Go-Jek offers a multi-functional service providing rides, meal deliveries, and haircuts.

Grab plans to deploy a substantial fraction of the $1.5 billion to develop services for Indonesia’s 264 million residents.

Go-Jek may have a home turf advantage in Indonesia, seeing as the company’s headquarters are in Jakarta. While Grab has soared to a record valuation by raising money from SoftBank, Go-Jek’s investor list also features high-profile supporters like Google and Tencent.

Go-Jek Just Raised $100 Million

Not to be outdone by Grab, Go-Jek is dishing out equity for more cash as well. The firm has received a $100 million capital infusion from Astra International in a series F round. Go-Jek announced  the capital expansion on Monday. The deal bolsters Go-Jek’s infrastructure in the Indonesian market, as the companies plan to jointly operate several thousand vehicles.

Preliminary reports are pricing Go-Jek’s enterprise valuation at around $9.5 billion.

Decentralizing The Future

The battle between “rideshare plus” firms like Uber, Lyft, Grab and Go-Jek is still taking place in the centralized economic paradigm. Under this model, Uber and Lyft are intermediaries: an expert in San Francisco can slash the incomes earned by Uber drivers across the world.

Christopher David of Arcade City told the Foundation for Economic Education last year:

We think Ethereum-based crypto-equity can solve the labor problem facing companies like Uber and Lyft, who are engaged in exploitative relationships with their drivers and face numerous lawsuits about their labor practices. Instead of begrudgingly allowing drivers to organize after a court ordered Uber to do so, a newer rideshare should proactively encourage drivers to self-organize into groups and co-ops.”