Grab has raised $1bn from Toyota in a new round of fundraising that values the ride-hailing company at $10bn following its recent acquisition of Uber’s south-east Asian business.
The latest deal is the biggest investment by Toyota in the ride-hailing sector, as traditional carmakers partner with technology companies to explore new ways of making money in the self-driving era.
Grab raised $2bn last year from Chinese ride-hailing company Didi Chuxing and SoftBank. It has raised $5bn to date with the latest investment from Toyota, which is already an investor in the south-east Asian start-up. Grab has been working with Japan’s largest carmaker on connected car services since August 2017, providing, for example, car insurance for Grab’s rental fleet based on driving data collected by a Toyota device.
Under the latest investment deal, Toyota said it would appoint one executive to Grab’s board and that a dedicated Toyota team member would be seconded to the car-hailing company as an executive officer. “This strong partnership will enable us to become the one-stop mobility platform in south-east Asia,” Anthony Tan, co-founder and chief executive of Grab, said in a statement on Wednesday.
A number of car companies have taken stakes in ride-hailing groups in recent years as they attempt to offer transportation services in addition to manufacturing and delivering vehicles to address declining car ownership. South Korea’s Hyundai Motor and Japan’s Honda Motor have also invested in Grab. General Motors has invested in Lyft while Toyota also has a stake in Uber through an investment fund backed by the Japanese carmaker.
In March, Uber agreed to fold its business in south-east Asia into Grab in exchange for a 27.5 per cent in the enlarged business — roughly matching its estimated market share in the region. Singapore-based Grab was founded in 2012 and has expanded aggressively across the region, operating in eight countries. Alongside car-booking, it has launched a mobile payments platform called GrabPay, designed for markets with under-developed banking, and GrabFood to replace Uber’s food delivery service.
Overall, the potential for businesses in ride-hailing and autonomous driving is enormous, with $3tn in revenue to be generated by 2050, according to a study by Intel and research group Strategy Analytics. In January, Toyota unveiled a driverless vehicle concept involving partners such as Amazon, Uber and Pizza Hut, signalling its electric vehicles could be used to deliver packages and pizzas to consumers who may not own cars. “We believe we can significantly expand the potential of our automotive business by extending from manufacturing and selling vehicles to providing the platform for vehicle use,” said Shigeki Tomoyama, Toyota’s executive vice-president in charge of the connected vehicles strategy, in a recent interview.