Southeast Asia’s Grab has received $856m from Japan’s Mitsubishi UFJ and IT services firm TIS as the ride-hailing company seeks to expand aggressively into financial services.
Grab, backed by SoftBank Group Corp, said it will use the funding to offer lending to Southeast Asian consumers and small and medium-sized enterprises. The company will also be providing insurance and wealth management products and services.
MUFG, Japan’s biggest bank by assets, is providing the bulk of the money, $706m. Separately, TIS, part of TIS INTEC Group is investing $150m in the Singapore-based company.
In Singapore, Grab has teamed up with Singapore Telecommunications, Singtel, and applied for an online banking licence in the country.
“MUFG’s investment into Grab is a vote of confidence in our super app strategy and our ability to build a long-term, sustainable business,” Grab’s president Ming Maa.
A mutually beneficial alliance
The Japanese bank, for its part, will combine Grab’s advanced technologies and data management expertise with its financial services, according to MUFG’s deputing president and incoming CEO Hironori Kamezawa.
“We believe this alliance will also generate additional momentum for our digital transformation of MUFG,” Kamezawa said.
Faced with a low interest rate environment at home, MUFG has turned to Southeast Asian businesses, investing in a some of the lenders in the region.
Progress in the digitisation of banking and fintech services has been slower in Japan than in other advanced countries, experts say. MUFG and other Japanese banks are playing catch-up by investing in new technology companies abroad.
Meanwhile, Grab and Indonesia-based rival Gojek are evolving from ride-hailing operator to become one-stop shops for a variety of services. These include payments, lending, food delivery, logistics, and hotel booking in Southeast Asia.
Reports of a possible merger between Grab and Gojek are not true, Gojek said.