Grab, Southeast Asia’s most valuable startup, raised more than $850 million from Japanese investors to fund an ongoing expansion into financial services across Southeast Asia.
Mitsubishi UFJ Financial Group (MUFG), the largest bank in Japan, will invest $706 million, while network systems and integration services provider TIS will inject $150 million.
“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,” Ming Maa, Grab’s president, said in a statement on Tuesday, as reported by Reuters.
Grab, backed by SoftBank Group Corp said it will use the funding to offer lending, insurance and wealth management products and services for Southeast Asian consumers and small and medium-sized enterprises.
Grab has been expanding into financial services, building on its ride-hailing, food delivery and e-wallet offerings in an effort to become a one-stop shop for on-demand services in Southeast Asia.
Tie-ups between tech startups and banks are becoming more common in the region, where widespread smartphone use promises greater access to clients who have traditionally been neglected by the financial system, Bloomberg noted.
Grab will co-develop financial products and solutions with the two investors, President Ming Maa said in a statement. The investments demonstrate “their confidence in Grab’s super-app strategy and our ability to build a sustainable long-term business,” he said.
According to Mobile World Live, in early 2019, Grab Financial Group submitted a joint application for a digital banking licence with Singtel, the largest mobile operator in Singapore: the Monetary Authority of Singapore plans to issue two digital banking and three wholesale licences by mid-2020.
In December 2019 Grab launched a physical payment card in its home market of Singapore to stand alongside a mobile wallet, with plans to extend availability across its entire Southeast Asia operation.