Grab will invest US$250 million in Indonesian startups over the next three years through its newly launched innovation arm, as the ride-hailing firm aggressively pushes to cement its position in the Southeast Asia’s largest economy.
The Singapore-based firm has raised US$2 billion in funding in recent months and also launched the Grab Ventures arm to develop technology start-ups in sectors beyond ride-hailing as it locks horns with Indonesia’s Go-Jek for regional dominance.
“We are looking at startups in both series A and B, which we could integrate into our ecosystem,” Ridzki Kramadibrata, managing director for Indonesia, told Reuters.
The company, which counts Chinese ride-hailing firm Didi Chuxing and Japan’s SoftBank Group Corp among its backers, has already starting looking at startups and will start funding rounds later this year, he added.
Grab is interested in healthcare and food-and-grocery delivery startups as well as those that facilitate digital payments and automated processes, he added.
Grab’s rival Go-Jek has already evolved from a ride-hailing service to a one-stop app allowing Indonesian clients to make online payments and order everything from food, groceries to massages. It is now looking to expand in Southeast Asia, to Vietnam, Thailand, the Philippines and Singapore.
Kramadibrata said Grab is currently the top ride-hailing player in Indonesia and that he was confident the firm would be able to maintain the lead. The firm is valued at around US$11 billion, according to sources.
“We hold 65 per cent of (Indonesia’s) ride-hailing market, as based on total rides and transactions,” said Kramadibrata. “And it won’t stop there, our market share is increasing.”
He reckons Grab holds majority market share in 137 cities in Indonesia, compared with Go-Jek’s roughly 50.
Kramadibrata said he based his estimates on internal and third-party data that he declined to reveal.
Go-Jek did not respond to Reuters requests for comment.
Its CEO, Nadiem Makarim, told Reuters this month that the company’s app was a market leader in Indonesia, processing more than 100 million transactions for 20-25 million monthly users.
He did not specify how many of those transactions were only for ride hailing.
Ride hailing services in Southeast Asia are expected to surge to US$20.1 billion in gross merchandise value by 2025 from US$5.1 billion in 2017, according to a Google-Temasek report.