According to a study by Google, the on-demand taxi service in Southeast Asia is predicted to grow from 18% annually over the following nine years to $13 billion by 2025. The variety of monthly passengers using the service is predicted to extend from 7.3 million in 2016 to 29 million by 2025. Singapore-based Grab, also generally known as GrabTaxi, is riding on this growth to develop into Southeast Asia’s most dear billion-dollar unicorn story.
Grab’s Finances
Grab was founded in 2012 by Harvard students Tan Hooi Ling and Anthony Tan. It initially began in Malaysia with an app called My Teksi, which was adopted by a small fleet of 30 taxis in Malaysia. Grab currently operates in 65 cities across Malaysia, Singapore, Indonesia, Thailand, Vietnam, Myanmar, and the Philippines. It has added additional services to its portfolio, including carpooling service GrabHitch, private automobile service GrabAutomotive, motorcycle hailing service GrabBike, delivery service GrabExpress, and bus services GrabCoach, GrabShuttle, and GrabShuttle Bus.
Grab has recorded greater than 50 million user downloads and has greater than 1.1 million drivers on its platform. Grab says it currently has a 95% market share in Southeast Asia in third-party taxi hailing and 71% in private vehicle hailing, with almost 3 million rides per day.
Grab makes money by collecting commission on the booking fee for every ride. The commission rate varies depending on the space of the ride, location, and time of day. Reports estimate Grab’s revenue at $80 million to $95 million annually, with a net lack of $100 million. Grab says it’s profitable in some industries and cities.
It has raised $4.1 billion in 10 funding rounds to this point from investors including Didi Chuxing, Emtek Group, Tokyo Century, Softbank, GGV Capital, Tiger Global Management and Singapore government fund Vertex Venture Holdings. Its last funding round was in July this 12 months, when it raised $2.5 billion in a round led by Didi Chuxing and SoftBank Capital at a valuation of over $6 billion. An earlier round in September 2016 valued Grab at $3 billion.
Grab’s expanding offering
Last 12 months, Grab also began expanding its digital payments services. It began work on GrabPay, a payments platform focused on the Indonesian market. The cashless digital wallet lives within the Grab app and lets users pay not just for Grab rides but additionally for other services. Earlier this 12 months, Grab announced the acquisition of Kudo, an Indonesian mobile payments startup. Kudo focuses on the population of Indonesia that lacks a bank card, access to a checking account, and even regular web access. It allows these users to make online purchases through POS kiosks positioned in public places. Terms of the acquisition weren’t disclosed, but analysts estimate the deal to be price between $80 million and $100 million.
Uber is attempting to enter the region by offering discounted rides and promotional prices. There are also local providers like Go Jek that provide ojek or motorbike rides with an identical business model. But Grab’s broader reach, coupled with improved service like an in-app messaging service that even translates languages, has helped it gain a bigger market share within the region.
For more research and evaluation on Unicorns, take a look at my latest book Entrepreneur Journeys, Billion Dollar Unicorns . The term “Unicorn” was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
Source: Google Temasek Report 2017 on the SEA economy | Techcrunch
