Grab raises US $ 300 million for ambitious fintech expansion

SINGAPORE: Southeast Asian ridesharing and food delivery giant Grab has raised more than US $ 300 million from investors led by South Korean firm Hanwha Asset Management Co Ltd for its financial services business expanding.

Grab said it was the first external financing for the fintech business, which has drawn ambitious plans in the areas of insurance, lending, wealth management and payments.

Grab competes with Gojek, Indonesia, and many local start-ups that attract millions of customers as they seek to disrupt financial services companies established in a region of some 650 million people.

“We are at an inflection point in Southeast Asia, as the pandemic has accelerated the need for digital financial services that help us grow and protect our income,” said Reuben Lai, senior managing director of Grab Financial Group in a press release.

READ: Grab tells employees he’s ‘in a position to acquire’ after Gojek merger report

Grab’s first backers such as GGV Capital and Singapore-based venture capital firm K3 Ventures have also helped fund the fintech arm. Among the new investors were fintech investment firm Flourish Ventures, backed by Ebay founder Pierre Omidyar.

“As our lives, work and activities increasingly move online, technology platforms have played an important role in formalizing the economy,” Tilman Ehrbeck, Managing Partner of Flourish told Reuters.

“They have a real opportunity to bring financial services to users who are often not reached by the traditional banking system, especially in Southeast Asia, which has relatively higher mobile internet penetration,” said he declared.

Reuters reported in September, citing sources, that Grab was negotiating with insurers such as Prudential PLC, AIA Group Ltd and others to raise US $ 300 million to US $ 500 million for the financial services unit.

In December, Internet platform company Sea Ltd and Grab’s business with Singtel each won Singapore’s first full digital banking licenses.

Backed by investors, including Softbank Group Corp, Grab seeks to evolve into an everyday application offering a variety of services.