Grab co-founders Anthony Tan and Tan Hooi Ling first met while pursuing an MBA at Harvard Business School.
Back in their home country, Malaysia, taxis were not a preferred mode of transportation. Getting a taxi was difficult, and many overseas travelers often complained about being overcharged by drivers.
Many were also afraid of getting into taxis on their own, fearing for their personal safety – even Hooi Ling used to pretend to be on the phone during late night taxi rides at the time.
When they entered their school’s business competition, they both wanted to tackle this problem. They shared the idea that the mobile phone revolution could help provide safe and reliable on-demand transport.
They took second place and won US $ 25,000 for their idea, which became their seed money for Grab.
Disrupt the SEA transport industry
Anthony and Hooi Ling launched MyTeksi in Malaysia in 2012, which made it possible to book a ride through an app.
This happened just a year before Uber launched its carpooling service in Singapore, and two years after Gojek in Indonesia.
The founders’ goal was to address the concerns of commuter taxis in Malaysia, but ultimately they wanted to address the region’s pressing transportation issues.
With that in mind, they expanded in the region from 2013, moving to Singapore, the Philippines and Thailand that year and to four other Southeast Asian countries over the next four years, se renaming along the way under the name GrabTaxi.
It has continued to expand its services, remaining sensitive to the needs of its clients in the respective countries. For example, he launched GrabBike in countries like Indonesia and Vietnam, as users prefer to ride motorcycles to avoid massive traffic jams.
In Singapore, he launched GrabShare, a carpooling option that allows users to benefit from lower fares.
In October 2017, Grab’s number of rides hits first billion. It hit the next billion rides in less than nine months after that, and passed three billion rides in January 2019.
As its driver and customer base grew, Grab has expanded from city to city and currently operates across eight Southeast Asian countries – Singapore, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand and Vietnam.
Acquire Uber Ride-Hailing Rival
When Uber entered the Southeast Asian market in 2013, Grab was only one year old, but ultimately turned out to be a serious competitor in the Southeast Asian market ( SEA).
While it was originally competing with Uber, Grab acquired Uber’s SEA operations in March 2018 has made it a major player in carpooling in Southeast Asia outside of Indonesia.
As part of the deal, Grab controls all of Uber’s operations – including its food delivery subsidiary UberEats – in countries like Cambodia, Malaysia, Vietnam, the Philippines, Singapore, Indonesia, Thailand. and Myanmar.
In return, Uber took a 27.5% stake in Grab, which already had a multibillion dollar valuation at the time.
However, the Singapore Competition and Consumer Commission (CCCS) said it was not informed of the merger.
He also said he had “reasonable grounds to suspect that the merger of Grab and Uber violated competition law” because the deal could lead to “a substantial decrease in competition for the car industry. private rentals in Singapore ”.
In September 2020, CCCS fined Grab and Uber a combined $ 13 million for fusion. Uber was fined $ 6.5 million, while Grab was fined $ 6.4 million.
Adopt a super app strategy
Today, Grab is more than just a ridesharing company.
He continued to develop a range of services for the daily needs of the region, from food to grocery delivery, payments and financial services.
Lauded for the “super app” model, it is believed to have been first launched by Chinese multinational conglomerates such as Alibaba’s Alipay and Tencent’s WeChat.
Grab officially launched its food delivery business GrabFood in May 2018, which has grown exponentially after the company took over UberEats operations in SEA.
It then added services like grocery delivery, hotel reservation, ticket purchase, and even video-on-demand streaming to its app.
As part of its financial offering, Grab launched its QR code-based mobile payment service, GrabPay, in January 2016.
Grab has also embarked on the provision of loans and insurance services as part of its “Grow with Grab ‘roadmap” strategy. It currently provides loans to small and medium-sized enterprises (SMEs) and microinsurance for drivers in Singapore.
GrabPay has also extended its financial services by offering “Pay Later”, a postpaid and installment payment service in Singapore; and a micro-investment product called AutoInvest.
More recently, Grab got a digital banking license with Singtel as a consortium of the Monetary Authority of Singapore (MAS).
With the license, it will now be able to provide retail customers with services such as account opening, deposits, as well as debit and credit cards.
According to MAS, the new digital banks will likely start operations from 2022.
Grab could soon be valued at nearly US $ 40 billion
In April 2014, Grab raised over $ 10 million of Temasek’s Vertex Ventures into a Series A. Following the funding, Grab moved its headquarters from Malaysia to Singapore.
Since then, Grab has continued to attract venture capital firms to fund its operations.
In September 2016, the company became one of the few Southeast Asian startups to be valued at over US $ 1 billion, achieving “ unicorn ” status.
After securing a significant investment from Toyota Motor Corp in June 2018, Grab’s valuation rose to 11 billion US dollars ($ 15 billion) in August.
It quickly became the region’s first “decacorn”, a term coined for startups valued at over US $ 10 billion.
According to Crunchbase, Grab has raised US $ 12.1 billion over 33 funding rounds (it is currently in Series I). To date, some of its major investors include SoftBank, Alibaba, Didi Chuxing, and Toyota.
Grab would have recently been in talks to publicize a merger with a special purpose acquisition company in the United States this could value it to nearly 40 billion US dollars.
If confirmed, the deal would make it the biggest blank check transaction ever. Grab is currently valued at over US $ 16 billion.
Earlier in January, sources also reported that Grab was exploring a listing in the United States and that its IPO could raise at least US $ 2 billion.
Previously, Grab co-founder and CEO Anthony said Grab can go public when all of its business is profitable.
Grab Chairman Ming Maa said in a company update that its core business “continues to grow well.”
Its total group net turnover has increased by around 70% year over year in 2020 compared to 2019, and it also expects to break even on food delivery by the end of this year.
The past decade has certainly been productive for Grab in terms of building market share. It will be interesting to see if the next decade will be profitable for the group.
Featured Image Credit: Nikkei Asia