Why Grab is investing $500mn in Vietnam
Grab has announced a five-year, $500mn investment program in Vietnam.
Though the company began as a taxi-hailing application, it has since expanded into a number of different fields, a fact reflected in the investment’s stated purpose which is to explore opportunities in fintech, mobility and logistics. GrabFood, for instance, is described by the company in its 28 August press release as Vietnam’s premier food delivery app, with daily orders averaging 300,000.
Russell Cohen, Head of Regional Operations of Grab, said: “This investment is a reflection of our redoubled commitment to Vietnam. The country’s rapidly developing economy and young, mobile-first population makes it ripe for the adoption of digital services. As we scale our food, parcel delivery, transport and payments business across the country, we hope to tap and invest in new opportunities emerging in the fintech, mobility and logistics space, in order to bring about greater value and innovation for our customers and partners.”
Grab was founded in Malaysia but is now headquartered in Singapore. A rival to the likes of Uber and Lyft, it has cornered the South East Asian market, operating in Singapore, Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam. Indeed, back in March 2018, the company acquired all of Uber’s operations in the region, in turn giving Uber a 27% stake in the business. Another prominent investor is Japanese Conglomerate Softbank, who in March put $1.46bn from the SoftBank Vision Fund into the business.
Its main regional rival is Indonesia’s Gojek, who in a February Series F funding round raised over $1bn from the likes of Tencent and Google. Yesterday, Bloomberg reported that Amazon was presently in talks to invest in the company, which would gain Gojek another powerful backer. In 2018, the company announced it was expanding to Vietnam, Singapore, Thailand and the Philippines, further challenging Grab’s dominance. Like Grab, it has diversified its offerings beyond ride-hailing to products such as an e-wallet and food delivery.
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