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Grab launches SME loans and micro-insurance in Southeast Asia

In its latest move beyond ride-hailing, Southeast Asia’s Grab has started to offer financing to SMEs and micro-insurance to its drivers.

The launch comes just weeks after Grab raised $1.5 billion from the Vision Fund as part of a larger $5 billion Series H funding round that’ll be used to battle rival Go-Jek, which is vying with Grab to become the top on-demand app for Southeast Asia’s 600 million-plus consumers.

Grab acquired Uber’s Southeast Asia business in 2018 and it has spent the past year or so pushing a ‘super app’ strategy. That’s essentially an effort to become a daily app for Southeast Asia and, beyond rides, it entails food delivery, payments and other services on demand. Financial services are also a significant chunk of that focus, and now Grab is switching on loans and micro-insurance for the first time.

Initially, the first market is Singapore, but the plan is to expand to Southeast Asia’s five other major markets, Reuben Lai,  who is senior managing director and co-head of Grab Financial, told TechCrunch on the sidelines of the Money20/20 conference in Singapore. Lai declined to provide a timeframe for the expansion.

The company announced its launch into financial services last year and that, Lai confirmed, was a purely offline effort. Now the new financial products announced today will be available from within the Grab app itself.

Grab is also planning to develop a ‘marketplace’ of financial products that will allow other financial organizations to promote services to its 130 million registered users. Grab doesn’t provide figures for its active user base.

Grab announced a platform play last summer that allows selected partners to develop services that sit within its app. Some services have included grocery delivers from Happy Fresh, video streaming service Hooq, and health services from China’s Ping An.

Go-Jek’s Get app officially launches in Thailand as Southeast Asia expansion continues

Go-Jek is extending its reach in Southeast Asia after its Thailand-based unit made its official launch, which included the addition of a new food delivery service.

Get, which is the name for Go-Jek business in Thailand, started out last year offering motorbike taxi on-demand services to a limited part of Thai capital city Bangkok, now the company said it has expanded the bikes across the city and added food and delivery options. Get’s management team is composed of former Uber staffers while CEO Pinya Nittayakasetwat was recruited from chat app Line’s food delivery business.

Over the last two months, Get claims to have completed two million trips in the past two months. There’s no word on when Get will add four-wheeled transport options, however. On the food side, Get is claiming to have 20,000 merchants on its platform but there are some issues. Rumming through the app, I found a number of listed restaurants that didn’t include menus. In those instances, customers have to input their dish and price which makes it pretty hard to use.

Go-Jek’s Get app in Thailand doesn’t include menus for a number of restaurants, making it nearly impossible to order

Grab is the dominant player in Thailand, where it offers taxis, private cars, motorbikes, delivery and food across eight markets in Southeast Asia. Go-Jek rose to success in its native Indonesia, where it began offering motorbikes on demand but has expanded to cover taxi, cars, food, general services on-demand and fintech. Its investors include Google, Tencent, Meituan and Sequoia India.

That’s the same playbook Grab is using, but Go-Jek is taking its time with its market expansions. Thailand represents its third new market beyond Indonesia, following launches in Vietnam and Singapore. The Philippines is another market where Go-Jek has voiced a desire to be present — it has even made an acquisition there — but regulatory issues are holding up a launch.

Regional expansion doesn’t come cheap and Go-Jek is in the midst of raising $2 billion to finance these moves. It recently closed $1 billion from existing investors, and Deal Street Asia reports that it could raise as much as $3 billion for the entire Series F round. That’s likely in response to Grab’s own fundraising plans. The Singapore-based company closed $2 billion last year, but it is looking to increase that total to $5 billion with a major injection from SoftBank’s Vision Fund a key piece of that puzzle.

Grab moves to offer digital insurance services in Southeast Asia

Grab is Southeast Asia’s top ride-hailing firm, thanks in no small part to its acquisition of Uber’s local business last year, but the company also houses an ambitious fintech arm, too. That just added another vertical to its business after Grab announced it is teaming up with China’s ZhongAn to introduce insurance.

Grab and ZhongAn International, the international arm of the Chinese insurance giant, said today they will create a joint venture that will provide digital insurance services across Southeast Asia. Grab said the new business will partner with insurance companies to offer the services via its mobile app. Chubb — a company that already works with Grab to offer micro-loans to its drivers — is the first partner to commit, it’ll offer insurance for Grab drivers starting in Singapore.

ZhongAn is widely-lauded for being China’s first digital-only insurance platform. It’s backed by traditional insurance giant PingAn and Chinese internet giants Tencent and Alibaba.

Grab’s move into digital insurance comes a day after Singapore Life, an online insurer in Singapore, closed the second part of a $33 million funding round aimed at expanding its business in Southeast Asia.

This ZhongAn partnership adds another layer to Grab’s services and fintech business, which already includes payments — both offline and online — and is scheduled to move into cross-border remittance and online healthcare, the latter being a deal with ZhongAn sibling PingAn Good Doctor.

The push is also part of a wider strategy from Grab, which was last valued at over $11 billion and is aiming to turn its app from merely ride-hailing to an everyday needs app, in the style of Chinese ‘super apps’ like Meituan and WeChat.

Indeed, Grab President Ming Ma referenced that very ambitious calling the insurance products “part of our commitment to becoming the leading everyday super app in the region.”

Last summer, Grab opened its platform to third-parties which can lean on its considerable userbase — currently at 130 million downloads — to reach consumers in Southeast Asia, where the fast-growing ‘digital economy’ is tipped to triple to reach $240 billion by 2025. Grab’s platform has welcomed services like e-grocer HappyFresh, deals from travel giant Booking and more.

Grab has also made efforts to develop the local ecosystem with its own accelerator program — called ‘Velocity’ — which, rather than providing equity, helps young companies to leverage its platform. It has also made investments, including a deal with budget hotel brand OYO in India, a fellow SoftBank portfolio company that has designs on expansion in Southeast Asia.

Grab itself operates across eight markets in Southeast Asia, where it claims to have completed more than two billion rides to date. The company is currently raising a massive Series H fund which has already passed $3 billion in capital raised but has a loftier goal of reaching $5 billion, as we reported recently.

Go-Jek, Grab’s chief rival, is expanding its business outside of Indonesia after launching in Vietnam, Thailand and Vietnam. Like Grab, it, too, offers services beyond ride-hailing and the company — which is backed by the likes of Meituan, Google and Tencent — is close to finalizing a new $2 billion funding round for its battle with Grab.

Golden Gate Ventures closes new $100M fund for Southeast Asia

Singapore’s Golden Gate Ventures has announced the close of its newest (and third) fund for Southeast Asia at a total of $100 million.

The fund hit a first close in the summer, as TechCrunch reported at the time, and now it has reached full capacity. Seven-year-old Golden Gate said its LPs include existing backers Singapore sovereign fund Temasek, Korea’s Hanwha, Naver — the owner of messaging app Line — and EE Capital. Investors backing the firm for the first time through this fund include Mistletoe — the fund from Taizo Son, brother of SoftBank founder Masayoshi Son — Mitsui Fudosan, IDO Investments, CTBC Group, Korea Venture Investment Corporation (KVIC), and Ion Pacific.

Golden Gate was founded by former Silicon Valley-based trio Vinnie Lauria, Jeffrey Paine and Paul Bragiel . It has investments across five markets in Southeast Asia — with a particular focus on Indonesia and Singapore — and that portfolio includes Singapore’s Carousell, automotive marketplace Carro, P2P lending startup Funding Societies, payment enabler Omise and health tech startup AlodokterGolden Gate’s previous fund was $60 million and it closed in 2016.

Some of the firm’s exits so far include the sale of Redmart to Lazada (although not a blockbuster), Priceline’s acquisition of WoomooLine’s acquisition of Temanjalan and the sale of Mapan (formerly Ruma) to Go-Jek. It claims that its first two funds have had distributions of cash (DPI) of 1.56x and 0.13x, and IRRs of 48 percent and 29 percent, respectively.

“When I compare the tech ecosystem of Southeast Asia (SEA) to other markets, it’s really hit an inflection point — annual investment is now measured in the billions. That puts SEA on a global stage with the US, China, and India. Yet there is a youthfulness that reminds me of Silicon Valley circa 2005, shortly before social media and the iPhone took off,” Lauria said in a statement.

A report from Google and Temasek forecasts that Southeast Asia’s digital economy will grow from $50 billion in 2017 to over $200 billion by 2025 as internet penetration continues to grow across the region thanks to increased ownership of smartphones. That opportunity to reach a cumulative population of over 600 million consumers — more of whom are online today than the entire U.S. population — is feeding optimism around startups and tech companies.

Golden Gate isn’t alone in developing a fund to explore those possibilities, there’s plenty of VC activity in the region.

Some of those include Openspace, which was formerly known as NSI Ventures and just closed a $135 million fund, Qualgro, which is raising a $100 million vehicle and Golden Equator, which paired up with Korea Investment Partners on a joint $88 million fund. Temasek-affiliated Vertex closed a $210 million fund last year and that remains a record for Southeast Asia.

Golden Gate also has a dedicated crypto fund, LuneX, which is in the process of raising $10 million.

Is Uber selling its Southeast Asia business to Grab?

 If you read the tech press, you might have seen reports that Uber is pursuing a sale in Southeast Asia that would see Grab, its Singapore-headquartered rival valued at $6 billion, acquire Uber’s business in the region. Rumors of such a tie-in have been rife for a while. Uber sold its China business in exactly such an arrangement in 2016, and it made a similar exit from Russia last year.… Read More

Google confirms investment in Indonesia’s ride-hailing leader Go-Jek

 Google has confirmed its investment in Go-Jek, the hail-railing service that rivals Uber and Grab in Indonesia. TechCrunch reported the investment last week, which was made alongside China’s Meituan-Dianping and Singaporean sovereign fund Temasek. The trio were part of a final tranche of a $1.2 billion round that Go-Jek began negotiating on last April, with commitments from the likes… Read More

Go-Jek buys three startups to advance its mobile payment business

 Go-Jek, the company leading Uber and Grab in Southeast Asia’s largest market, has bagged a hattrick of deals to advance its mobile payment strategy. Indonesia-based Go-Jek revealed it has acquired offline payment firm Kartuku, payment gateway Midtrans and payment and lending network Mapan for undisclosed sums. The company started out in 2015 offering a ride-hailing service for… Read More

Uber’s new Asia chief wants to work with governments and taxi firms not against them

 New CEO Dara Khosrowshahi has been vocal in pledging to reform Uber’s toxic culture to take the business to the next level — and ultimately an IPO — but, over in Asia, another recent arrival is presiding over a revamped approach which includes turning those who were once enemies into friends. Brooks Entwistle, a former Chairman of Goldman Sachs Southeast Asia, joined… Read More

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Indonesia's largest fleet of taxis teams up to beat ride-hailing apps

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There is a war being waged for Jakarta’s nine million commuters, and the country’s largest traditional taxi company just made a huge play to counter the rising threat from the ride-hailing competition.

Blue Bird, which runs a fleet of 23,000 taxis across the country, announced on Thursday it was teaming up with another big traditional player, Go-Jek.

Go-Jek, which dominates the motorcycle taxi market, has expanded in recent years to cars, under its Go-car feature. 

The move is a strategic one, aimed at tackling a big announcement also made on Thursday by Grab, the reigning ride-hailing app. Read more…

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