Looks like Jack Ma has Grab(bed) a deal for Alibaba. The latest news from the e-commerce company is that they are planning to invest in Grab, the ride hailing start-up of South East Asia. Sources say that the Singapore based start-up has attracted an investment of over $1 billion from Alibaba’s Jack Ma and Softbank Group’s Masayoshi Son.
Reports reveal that Jack Ma is teaming up with Masayoshi Son to invest around $1.5 billion through his e-commerce venture Alibaba or its financial division, Ant Financial. The objective is to pump money into Grab’s operations and make it competitive to take on the likes of Uber Technologies, in the South East Asia region. Grab already has another potential investor, Didi Chuxing, the leading ride-hailing company in China which is backed by Apple.
The underlying fact is that if Ma invests in Grab, then he will be able to push Alipay, the mobile payment platform, to a large customer base in the South East Asia region. Bloomberg noted that its rival Tencent has partnered with another ride-hailing app, Go-Jek, in Southeast Asia to get consumers to use its digital payment service.
The e-commerce business in China is about to hit a tipping point, and that’s why companies like Alibaba are diversifying to new areas. South East Asia has turned out to be a huge opportunity for investors like Ma and his competitors because of its vast population and the growing startup sector.
If Grab grabs this deal, it will be a phenomenal achievement and break records in fundraising in the region. This round of fundraising will consume the total evaluation of Grab to a whopping $3 billion from the previous evaluation of $750 million. Grab and Go-Jek are undergoing severe competition, particularly in the region of Indonesia. Grab also has the support of Tiger Global Management, a privately owned investment firm and GGV Capital, whereas Go-Jek is backed by Tencent, a Chinese investment holding company whose subsidiaries provide media, entertainment, payment systems, internet and mobile phone value-added services and operate online advertising services in China.
Anirudh M. for TechFunnel.com