Catering to Southeast Asia, on-demand transportation and mobile payments platform Grab Inc has recently secured up to $700 Mn in debt financing from unnamed global and regional banks. The company has also entered an exclusive partnership with SMRT, Singapore’s premier multi-modal land transport provider, to build the largest and most advanced fleet in Singapore.
Founded in 2011, Grab has expanded its operations in six countries Singapore, Indonesia, Philippines, Malaysia, Thailand and Vietnam. The taxi-hailing platform had also opened an R&D centre in Bengaluru, earlier this year. In the last one year, Grab has raised $2 Bn funds majorly from Chinese ride-hailing company Didi Chuxing (DiDi) and Japanese telecom conglomerate SoftBank Group.
The $700 Mn debt facilities, secured from banks, will be used to create the largest car rental programme in Southeast Asia to meet Grab’s driver-partners’ demands in the region, according to the company statement. The partnership with SMRT will allow Grab to deepen its presence, as SMRT taxi drivers will now use Grab exclusively for third-party taxi bookings. Both the companies will offer dynamic fix pricing under a new Grab service which will be launched soon.
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Melvin Vu, Head of GrabTaxi Singapore said: “Grab has been engaging the authorities since December on implementing dynamic fixed fares for taxis, and we are glad that they have given the green light. The current taxi fare model does not account for real-time passenger demand and driver supply, which often means that passengers pay a surcharge even when there are many available taxis within the vicinity. Dynamic fixed fares ensure that taxis are better utilised throughout the day and passengers enjoy more affordable rides based on real-time market demands, while not eliminating metered fares. We look forward to working with SMRT Taxis and our partnering operators to start bringing the benefits of dynamic fixed fares to the community soon.”
Aiming to build the largest car rental fleet in Southeast Asia by Q4 2018, the current debt facilities and SMRT partnership will help Grab make more cars available for rental, provide more favourable rental terms and services for driver partners. Grab has currently 1.8 mn drivers operating in its regional network. As car-hailing service provider, Grab’s services are mostly used in Singapore, Indonesia, Philippines, Malaysia, Thailand and Vietnam.
With SMRT’s deal, Grab is hoping to bend the ball against its competitor Go-Jek which recently had raised $1.2 Bn in its latest funding round led by Chinese Internet company Tencent. Catering to Indonesian market currently, Go-Jek is planned to launch its services in other Southeast Asia marketing escalating its war-game with Grab in other countries’ markets too.