Southeast Asian ride-hailing and food delivery giant Grab has raised more than $300 million from investors led by South Korea’s Hanwha Asset Management Co. Ltd for its rapidly-expanding financial services business.
Grab said this is the first external funding for the fintech business, which has chalked out ambitious plans in insurance, lending, wealth management and payments.
Grab competes with the likes of Indonesia’s Gojek and many local start-ups that are attracting millions of customers as they look to disrupt established financial services companies in a region home to some 650 million people.
“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 Group said in a statement.
Grab’s early backers such as GGV Capital and Singapore venture capital firm K3 Ventures also participated in the fintech arm’s funding. New investors included fintech investment firm Flourish Ventures, backed by EBay founder Pierre Omidyar.
“As more and more of our life, work and activites move online, tech platforms have played a big role in formalising the economy,” Tilman Ehrbeck, managing partner at Flourish told Reuters.
“They have a real opportunity to bring financial services to the users who often are not reached by the traditional banking system, particularly true in Southeast Asia, which has a relatively higher mobile internet penetration,” he said.
Reuters reported in September, citing sources, that Grab was negotiating with insurers including Prudential PLC, AIA Group Ltd and others to raise $300 million to $500 million for the financial services unit.
In December, internet platform company Sea Ltd and Grab’s venture with Singtel each won Singapore’s first digital full bank licences.
Backed by investors including Softbank Group Corp, Grab is seeking to evolve into an everyday app offering a variety of services.