Toyota to invest US$1b in Grab's latest funding round

Galtero Lara
Junio 13, 2018

Grab said it plans to work with its new investor "to create a more efficient transport network that will ease traffic congestion in Southeast Asia's megacities" and help its drivers increase their income.

Toyota Motor Corp. will buy a $1 billion stake in Grab in one of the largest investments by a carmaker in a ride-hailing provider, underscoring the push by the auto industry to move from manufacturing to services.

Since August 2017, Toyota and Grab have been developing connected services for the latter, utilising driving data collected by Toyota's TransLog data-transmission driving recorder.

A Toyota executive will be appointed to Grab's board of directors and a dedicated Toyota team member will be seconded to Grab as an executive officer, the ride-hailing firm said.

"This investment isn't necessarily about making money, but about getting access to technology that fits in some place in Toyota's broader business", said Edwin Merner, the Tokyo-based president of Atlantis Investment Research Corp., which doesn't own Toyota shares but is invested in Toyota Tsusho.

Carmakers and technology companies alike are working toward a future where autonomous robotaxis will lessen the need for individual vehicle ownership. The company has also backed Uber Technologies and invested in Japan Taxi, an Uber rival run by the chairman of Tokyo's biggest taxi operator.

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According to Grab, this investment is by far the largest made by an automative manufacturer in the ride-hailing sector.

Toyota's investment will allow Grab, which counts peer Didi and Japan's SoftBank Group Corp as investors, to further expand its range of online to offline services, such as food delivery and digital payments, deeper into the region.

"A board seat nearly guarantees that Grab will buy cars from Toyota", said Steve Man, an analyst at Bloomberg Intelligence in Hong Kong. In addition, collaborations in driving-data-based automotive insurance, financial services for Grab drivers and maintenance services are also contemplated under the new partnership. This strong partnership will enable us to become the one-stop mobility platform in Southeast Asia.

Toyota put money into Grab via its Next Technology Fund past year, but this time around the capital comes directly from the parent company.

Ma estimated that Grab will reach over US$1 billion in revenue this year, as its users exceed 100 million in the region. Go-jek is expected to expand its operations outside Indonesia this year in countries such as Singapore, the Philippines, Thailand and Vietnam. In particular, that will involve close collaboration with the Toyota Mobility Service Platform (MSPF), which is working on areas such as user-based insurance, new types of financial packages and predictive vehicle maintenance.

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