Grab Secures $700m in Debt Financing
Ride-hailing and mobile payment firm Grab announced that it has secured debt financing that amounted to a whopping $700 million from unnamed global and regional banks.
Rivaling Uber Technologies Inc, whose CEO recently met with a transport official in London to settle a dispute regarding its operating license, Grab said that it is aiming to use the latest financing to make the creation of “the largest car rental program in Southeast Asia” possible.
Additionally, the latest funding round comes after the company announced its $2 billion funding session, which was then led by Didi Chuxing (DiDi) a Chinese ride-hailing company, and Japanese telecom conglomerate SoftBank Group. This happened less than ten months ago.
An extra $500 million is expected to be given and invested soon. A few months earlier, the company had had its hands on $750 million in a previous oversubscribed round, which was led by SoftBank.
The car rental program is set to roll out with the aim of meeting the growing demand from Grab drivers in the region. The company currently has more than 1.8 million drivers across its network, which it claimed to be the largest land transportation fleet in Southeast Asia.
“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. Now with over 72 percent market share in the region, we will further consolidate our unassailable market lead through the largest car rental program in Southeast Asia,” said Ming Maa, Grab’s president.
The financing will be divided and a portion of it will be poured on the efforts to make more Grab cars for rent easily spotted on the road, provide more favorable rental terms and services for the benefits of the drivers, and ultimately increase the number of vehicles on the road.
Partnership with SMRT
Grab also announced its partnership with SMRT, which is Singapore’s premier multi-modal land transport service provider. The resulting fleet of cars will include friendly hybrid and fully electric vehicles.
The partnership enables Grab to have exclusive access to SMRT’s present and future taxi and private car fleet management prowess.
According to the deal, Grab drivers who are renting vehicles via the firm’s car rental business, which is called GrabRentals, will be provided with competitive car rental and maintenance rates. They will also have access to the “most advanced commercial vehicles.”
Grab reported that its market share at present is at 95 percent in third-party taxi-hailing and 72 percent in private vehicle hailing.
“Grab is on track to build Singapore’s largest and most advanced commercial fleet. We continue to collaborate to complement and strengthen each other’s transportation network. Ultimately, we want to provide affordable services for driver-partners and passengers, and serve all segments of society including public transport users,” said Lim Kell Jay, who is the Head of Grab Singapore.
Grab’s services include private car, motorbike, taxi, and carpooling services across seven countries and more than 130 cities in the region. Its app has already registered 63 million downloads. It also offers mobile payments service via its GrabPay platform.
According to TNS, which is a global market research firm, Grab is the car-hailing brand most often used in Singapore, Indonesia, the Philippines, Malaysia, Thailand, and Vietnam.