Toyota Plans Billion-Dollar Investment in Ride-Hailing Startup Grab

Marco Green
June 13, 2018

The deal comes as the auto industry faces a spike in the need for technological prowess with the advent of features such as autonomous driving, while app makers offer passengers the option to forgo vehicle purchases by connecting them with drivers.

South Korea's Hyundai Motor Co and Japan's Honda Motor Co Ltd have also previously funded Grab, which said it has achieved run-rate revenue of over $1 billion.

Wednesday's announcement deepens Toyota's partnership with Grab, following an earlier, undisclosed investment by the automaker's trading arm past year.

Toyota is investing a further $US1 billion in ride-sharing giant Grab.

It counts Softbank and its Chinese equivalent, Didi Chuxing, among its largest backers. The investment is the largest ever of its kind by an carmaker into the ride-hailing industry, according to Grab.

A man walks past a Grab office in Singapore March 26, 2018.

The investment comes as Toyota works to adapt to what company president Akio Toyoda calls "profound change" in the industry.

Grab says that this investment allows it to further expand its range of O2O services, such as GrabFood and GrabPay, deeper into the region.

In return for its capital, Toyota will also get a board seat and the opportunity to place an executive within Grab's team.

Grab now claims over 100 million downloads of its app across eight countries in Asia, including Singapore, Indonesia, Vietnam, Thailand and more.

Grab will also work with Toyota on connected vehicle services such as user-based insurance, financing programmes and predictive maintenance features for Grab's drivers. This strong partnership will enable us to become the one-stop mobility platform in Southeast Asia.

The data could also help Toyota develop its own next-generation mobility services, including a self-driving electric vehicle aimed at companies for use in tasks such as ride hailing, package delivery and mobile shops.

In a statement, Toyota said the deal "is aimed at achieving connectivity for Grab's rental auto fleet across Southeast Asia, and at rolling out various connected services throughout the region that utilize vehicle data" stored by Toyota.

Last month, Indonesian ride-hailing and online payment firm Go-Jek said it would enter Vietnam, Thailand, Singapore and the Philippines in the next few months, investing $500 million in its worldwide push. Grab recently took over Uber's Southeast Asia operations after years of competition, and is now going head-to-head in Indonesia with rival Go-jek.

Grab's main rival is now Indonesia's Go-Jek which last month said it would invest $500 million to begin expanding overseas.

Other reports by Click Lancashire

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