Hanwha leads $300m Series A for Grab's financial unit

GGV Capital, Arbor Ventures, and K3 Ventures also participated, as did Flourish Ventures, an investor affiliated with eBay founder Pierre Omidyar. The spin-off has reportedly been in process since early 2020, when Grab raised $856 million from Japan’s Mitsubishi UFJ Financial Group and TIS Intec Group with a view to building out various fintech applications.

That investment was part of a Series H targeting $6.5 billion said to value Grab at $10-14 billion. Grab has raised private equity funding as recently as August, when Korea’s STIC Investments committed about $200 million, with part of the proceeds to go toward the financial services business. STIC provided about half of the total from a special situations fund, while the rest came from co-investors, according to AVCJ Research.

Grab describes its financial services unit as Southeast Asia’s leading fintech platform with operations across payments, lending, and insurance. It works with 600,000 merchants and has more than 214 million mobile downloads. The flagship app, GrabPay, is used in all six major ASEAN markets and features a remittance service. Under the name Grab Financial, it is expected to maintain a synergistic relationship with its parent company.

“We are at an inflection point in Southeast Asia, as the pandemic has accelerated the need for digital financial services that help us grow and protect our incomes,” Reuben Lai, senior managing director at Grab Financial, said in a statement.

“We are delighted to draw upon the expertise of top investors who know financial services and fintech well, so that we can continue to build and open up access to affordable and transparent financial services for millions of underserved people and small businesses, and make inroads into financial inclusion in the region.”

Grab Financial recorded a 40% increase in revenue during 2020. A number of new services were adopted during this period, including AutoInvest, a retail wealth management product that was said to nearly double its number of monthly users in December. Further traction from insurance distribution as monthly active users quadrupled to 4.5 million. Grab Financial also won approval to set up a fully digital bank in Singapore alongside Singtel.

It coincides with an ongoing Series F by Grab’s regional rival Gojek, which is seeking to raise $2 billion at a valuation of $9-10 billion as part of a strong financial services-focused agenda. Gojek received investment from PayPal last June and also counts Visa and e-commerce players JD.com and Rakuten as backers. GoPay, its mobile wallet, is said to be the most popular cashless payment option in Indonesia.

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• Topics
• Southeast Asia
• Expansion
• Financials
• Technology
• Singapore
• K3 Ventures
• Arbor Ventures
• GGV Capital
• Grab
• Financial Services
• Fintech
• TMT