Southeast Asia's Grab gets $700m in debt funding

According to a release, Grab will use the new financing to expand its car rental fleet in Southeast Asia, making more vehicles available for its drivers and allowing them more favorable rental terms and services. The company has also partnered with Singapore-based transportation provider SMRT for access to SMRT’s licensed taxi and private care fleets.

Grab’s car rental program is a key part of its expansion plan in Southeast Asia, where private car ownership is low compared to other regions. The initiative gives temporary access to vehicles to potential drivers who otherwise would be unable to work for Grab.

Grab was founded in 2012 and is active in seven countries and 132 cities in Southeast Asia. The company claims a 95% market share in third-party taxi hailing and 72% in private vehicle hailing, and more than 63 million downloads of its mobile app.

The debt funding comes as Grab raises a new funding round, which it has said it expects to close at $2.5 billion. SoftBank and Chinese peer Didi Chuxing committed $2 billion to the round earlier this year, and Toyota Tsusho, a division of Toyota Group, invested an undisclosed amount in August. The round would take Grab’s total disclosed funding above $3.9 billion and bring its valuation to a reported $6 billion.

SoftBank and Didi have committed multiple investments in Grab between them, along with other investors including Tiger Global, China Investment Corporation, GGV Capital and Vertex Ventures. Did has also formed a partnership with Grab, India’s Ola and US-based Lyft. The idea is that customers of one service can use the same app to order rides from multiple other services.

In addition to its core transportation-focused product, Grab has branched out into other verticals, such as courier and take-out delivery services. Last December the company expanded its GrabPay cashless payment system, which previously had to be linked to a credit card, into a mobile wallet that can be topped up through various banks, ATMs and convenience stores.

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• Topics
• Southeast Asia
• Consumer
• Technology
• Credit
• Singapore
• TMT
• Transportation
• Growth capital