Grab, a Singapore-based ride-hailing company, gave us insight today to where some of its billions in venture capital funding are headed: Indonesia.
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The company announced that $2 billion of SoftBank’s previous financial commitments will be targeted towards its well-established Indonesian operations. Indonesia is Grab’s largest market and also the home of its biggest regional competitor, Go-Jek.
SoftBank CEO Masayoshi Son said there’s plans for a second Grab HQ in Indonesia, reports TechCrunch. While the $2 billion capital commitment to the country — made possible by SoftBank — isn’t new, Son reportedly said that “on top of that, we will invest more.”
For SoftBank, which recently announced a second Vision Fund, making bets on ride-hailing companies isn’t a recent trend. Back in 2018, the Japanese conglomerate invested roughly $7 billion in Uber. SoftBank also invested in China’s Didi Chuxing, and India’s Ola. One analyst put SoftBank’s stakes in these three companies as worth anywhere between $22.1 billion and $26.5 billion, reports Bloomberg.
As we’ve covered time, time, and time again, Singapore’s Go-Jek and Indonesia’s Grab keep adding cash to their seemingly never-ending funding rounds (Grab’s Series H and Go Jek’s Series F.) It’s because ride-hailing, you guessed it, costs a lot of money. But, as our EIC Alex Wilhelm tell us, the industry can wrack up billions in bets and hopes without even proving profit. It shows that some investors are okay with a future of potential profit, as they stay distracted by booming growth in the present.
Plus, as TechCrunch’s Ingrid Lunden points out, this capital commitment could help Grab be in better cahoots with the local Indonesian government and the tech scene there, since the announcement was made after a meeting between the company, SoftBank, Indonesia’s president and other high-ranking officials.
To wrap up with some context, Grab and Go-Jek are both barreling toward become ‘super-apps’ in Southeast Asia and beyond. I’m betting it won’t be too long until we’re back here reporting on the new cash, or promises, the companies make to do so.
Illustration: Li-Anne Dias.