Southeast Asia’s Grab, a ridesharing rival to Uber, has welcomed a new backer after Honda announced a strategic, undisclosed investment in the company today.
Grab raised a $750 million round led by SoftBank at a valuation of $3 billion in September, yet still it is adding more backers. This deal is an extension of that huge Series F round, and it is the second of its kind this month for Grab following an undisclosed investment from financial services firm Tokyo Century. While Honda is a major name to add to Grab’s investor list, it isn’t immediately clear how the companies will work together going forward, although we know it will initially focus on motorbikes.
For those less familiar with Grab, it includes motorbike taxis on demand, alongside private cars and licensed taxis in six countries in Southeast Asia. That’s where Honda, one of the world’s largest sellers of motorbikes, can play a major part, although it is worth noting that the “GrabBike” service isn’t available in all of Grab’s country markets at this point.
“Multiple areas [of collaboration] are in discussion, and that will include the sale of bikes to drivers,” a Grab spokesperson told TechCrunch, adding that Honda will focus on areas such as telematics and safety equipment, and it may expand to Grab’s four-wheeled vehicles later, too.
That’s a lot more information than the accompanying press release, which simply said that Honda and Grab will “collaborate on various initiatives to enhance benefits for GrabBike drivers and riders.”
While Uber is the obvious foe for Grab, the company is heavily focused on Indonesia, where Go-Jek, a startup recently valued at $1.3 billion, leads the growing motorbike taxi market. If you’ve ever visited capital city Jakarta, with a population of 10 million and gridlocked roads, you’ll see why a bike gets you from A to B far, far quicker than a taxi. With that in mind, this deal with Honda seems focused on pecking away at Go-Jek’s lead in Indonesia, which is Southeast Asia’s largest economy and the world’s fifth most populated country.
The Honda deal, like the Tokyo Century alliance, is another that seems to have been landed by Ming Maa, the former SoftBank executive who joined Grab as president in October. Maa’s role includes financial management of Grab — he’s taking over many responsibilities from Grab’s CFO, who is leaving — alongside making deals. That’s an interesting position given his past with SoftBank and the potential for Grab to make an exit via an IPO. That’s something the company hasn’t talked about much, but it could be a dark horse for a listing in 2017 — either in Singapore, where Grab is based, or elsewhere.
Grab is present in 34 cities in six countries in Southeast Asia. It claims over 24 million app downloads and a pool of more than 500,000 drivers. Uber’s data for the region is unclear, and Go-Jek is present in Indonesia only at this point.