Grab buys VC-backed Indonesian e-commerce player Kudo

Financial details were not disclosed. Grab, which itself has received more than $1 billion in VC backing, had planned a buyout of the company earlier this year for more than $100 million, according to Reuters.

The deal aims to extend Grab’s driver and rider recruitment network across Indonesia by integrating the two businesses’ operational footprints. The enlarged company will also deploy the GrabPay mobile payments platform to develop Kudo’s financial services offerings, including insurance and consumer loans.

“Given that GrabPay is already one of the most widely-used payments platforms in Indonesia, this acquisition creates immediate synergies with our existing business,” Albert Lucius, CEO of Kudo, said in a statement.

It marks the first transaction in Grab’s recently announced “Grab 4 Indonesia” plan, which aims to invest $700 million in the country over the next four years. The initiative includes the launch earlier this year of a $100 million fund targeting start-ups in the mobile and financial services industries, particularly those serving smaller communities that have yet to benefit from the digital economy.

Founded in 2014, Kudo specializes in helping unbanked consumers in rural areas shop online. This is achieved by connecting customers with online merchants and service providers via a network of more than 400,000 agents in 500 towns across Indonesia. In addition to online shopping, services include mobile phone credit top-up and bill payments.

Kudo received a Series A funding round of undisclosed size from Gree Ventures, East Ventures, 500 Startups and IMJ Investment Partners in 2015. East Ventures led a seed round the prior year. The company has also received investment from Indonesian media conglomerate Emtek, according to local media.

Indonesia’s emerging VC market has been characterized by rapid growth and favorable demographics but still relatively sparse exit activity. E-commerce has been identified as an important growth area due to a combination of untapped potential in online retail verticals and underdevelopment in digital payments infrastructure. Only 6% of the 250 million population is estimated to hold a credit card and fewer than half have a bank account.

Grab was established in 2012 as GrabTaxi and eventually expanded to encompass private car, motorbike and carpooling services. It has more than 630,000 drivers and 33 million user downloads across six countries in Southeast Asia, with Indonesia being its largest market. SoftBank is the most significant investor in Grab, leading a $750 million round last year and committing $250 million in 2014. 

High competition in Indonesia’s ride-hailing space has encouraged participants, including Grab, to expand into related logistics segments such as last mile and food delivery. The company’s biggest rivals include Uber and locally-based Go-Jek, which received $550 million last year from KKR, Warburg Pincus, Farallon Capital and Capital Group Private Markets.

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• Topics
• Southeast Asia
• Consumer
• Technology
• Trade sale
• Indonesia
• TMT
• M&A
• Venture
• Gree Ventures
• East Ventures
• 500 Startups