Grab Plans $700-Million-Investment In Indonesia
Investvine, A Company of Inside Investor, Ltd.
Feb 11, 2017

Singapore-headquartered ride-sharing startup Grab has plans to invest $700 million in Indonesia over the next four years as part of its expansion plans in the populous, but infrastructurally challenged country.

In what it calls its 2020 Master Plan, Grab wants to put millions into research and development, including in a new R&D facility in Jakarta, and tech talent training. The company said at a press conference on February 2 that the investment would also support the Indonesian government’s ambition of becoming the region’s largest digital economy by 2020.

Grab said it seeks to hire 150 engineers over the next two years for its R&D center and set up a $100 million fund for investing in startups focusing on social issues, like financial inclusion, and mobile payment solutions, among others. The large investment is funded mainly by the amount Grab raised in a financing round led by Japan’s SoftBank and including Honda last year.

There are also plans to cooperate with Indonesia’s largest consumer corporation Lippo Group and develop a combined e-payment platform that would allow consumers to use the Grab mobile app to pay for goods and services within Lippo’s retail network, which comprises of department stores, hypermarts, cinemas, coffee shops and e-commerce portals.

Grab operates GrabCar and GrabBike services in Indonesia, saying that each business grew by more than 600 per cent in 2016. Its range of ride-sharing services were available in several Indonesian cities, including Bali, Bandung, Medan and Surabaya.

Grab’s main competitor in Indonesia is Go-Jek, which is backed by US equity firms KKR and Warburg Pincus and launched its Go-Pay digital payments service last April.

The online ride-hailing market in Southeast Asia is forecast to grow from $2.5 billion in 2015 to $13 billion by 2025, with the number of monthly users rising from 7 million to 29 million, according to joint research by Google and Singapore’s Temasek, which is an investor in Grab.

Indonesia is Grab’s largest market in Southeast Asia where it also operates in Malaysia, Thailand, Vietnam, Philippines and Singapore. The company claims to have more than 630,000 drivers and 33 million downloads of its app across the region.

by Arno Maierbrugger

Company Investvine, A Company of Inside Investor, Ltd.
Contact Imran Saddique