After raising $750 million in additional funding, ride-sharing service provider Grab takes on a defensive stance to protect its market in South East Asia against the U.S. firm Uber Technologies Inc., which is keen on infiltrating the region after selling its Chinese operations.
With South East Asia's huge middleclass demographic, it is the ripe market for ride-hailing services, making it a viable target for Uber. With Uber's move to concentrate on the region, Grab needs to strengthen its position in Southeast Asia. This way, it is in a better position to protect its interests in the region.
Grab's Position On The South East Asian Market
After its launching in 2012, Grab has been a dominant presence in South East Asia expanding its operations to Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. At present, Grab claims that it controls more than half of the private-car services while it saturates the market for third-party taxi-hailing services since it controls about 95 percent.
With the newest cash infusion, Reuters reports that Grab's capital position is now at more than $1 billion while its current valuation is more than $3 billion.
Japan's SoftBank Group, an existing investor, led the latest funding round. In a statement published by Forbes, Grab CEO Anthony Tan stated that this funding will help the four-year-old company's pursuit of its long-term goals while building their market leadership.
Uber Eyeing Southeast Asia
After a costly foreign interest in China, Uber decided to sell out to its rival Didi Chuxing. This move freed up significant amounts of capital allowing it to shift its focus on the more viable Southeast Asian market.
Reports say that Uber is increasing technologies, people and resources in Southeast Asia. The U.S. firm is apparently hiring more engineers to strengthen its presence in the region.
Prior to Grab's cash infusion, its Indonesian counterpart, Go-Jek, raised $550 million to support its operations in the region.
If Didi Chuxing 's strategy is any indication, the best way to fend off Uber from taking over the market would be to raise enough money to combat its attacks. Whether Grab could retain its foothold in the Southeast Asian market would depend on its success in diversifying its services and in fending off Uber's attempts to chip off its current market share.
