Leading company Grab taps banks for record US$700 million
Ride-hailing company Grab said it has secured debt financing of up to US$700 million (S$952 million), the largest raised by a South-east Asian start-up.
It also announced that it has signed an exclusive partnership with Singapore Mass Rapid Transit (SMRT), one of Singapore’s public transport operators, to build the largest car rental fleet in the region by the end of next year.
The US$700 million borrowings, from leading global and regional banks, will be used to create the largest car rental programme in South-east Asia to meet robust demand from driver partners in the region, Grab said in a media statement yesterday (Oct 20).
It said that with the new financing in hand, it will make more cars available for rental, provide more favourable rental terms and services for driver partners, and increase the supply of vehicles on the road, making rides faster and more affordable for passengers.
The number of Grab drivers in the region has nearly tripled since January to over 1.8 million, which it says is the largest land transportation fleet in South-east Asia.
Grab president Ming Maa said: “This record-breaking debt financing round clearly demonstrates high confidence in our business model and market leadership from several of the world’s leading banks.”
With over 72 per cent market share in the region, he said Grab plans to further consolidate its market lead through the largest car rental programme in South-east Asia.
Grab also said it will build the largest and most advanced taxi and private-hire car fleet in Singapore, with exclusive access to SMRT’s entire network of taxis and Strides private-hire cars. It will also have exclusive access to SMRT’s current and future taxi and private car fleet management capabilities.
Strides is a subsidiary of SMRT that also offers limousine car services as well as premium bus services.
Market observers pointed out that this is not the first time the two companies have tied up. Last year, SMRT partnered Grab for the launch of Strides.
In March this year, SMRT signed an agreement with Grab for its cabbies to use Grab’s app exclusively for third-party bookings. That month, SMRT was also one of five cab operators here to partner the ride-hailing firm to offer fixed fares and dynamic pricing for its taxis.
It was also reported in April that the transport operator was in talks to sell its taxi business to Grab. However, the deal was reported to have hit a bump as SMRT wanted affected workers to retain their jobs, but the start-up did not want to take on the additional headcount. Both firms declined comment on the matter at the time.
When contacted, SMRT did not want to elaborate on the latest tie-up with Grab.