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Uber rival Grab to raise United States dollars 2.5 billion in new financing

Uber rival Grab to raise United States dollars 2.5 billion in new financing

Grab, the ride-hailing company competing with Uber in Southeast Asia, has pulled in $2 billion of new financing from existing investors Didi Chuxing, the company that defeated Uber in China, and SoftBank.

Both Didi and Softbank have long-standing relationships with Grab, formerly known as GrabTaxi.

The firm expects to raise an additional US$500 million, bringing the total to US$2.5 billion in this round, which it said would be the largest ever single financing in Southeast Asia.

The company claims a 95 percent market share in third-party taxi hailing and 71 percent market share in private vehicle hailing in Southeast Asia. It operates private auto, motorcycle, taxi and carpooling services across seven countries in the region, with 1.1 million drivers.

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"The heterogeneity of the banking system, multiple competitors in each country, and multiple regulations to meet are barriers to success", said analyst Rushabh Doshi at researcher Canalys.

The ride-hailing apps are popular with residents of congested Southeast Asian cities, who aside from using them for rides also find them convenient for fetching takeaway food, delivering documents and other tasks. But one rival that is upsetting Grab is Go-Jek, a bike and auto on-demand platform in Indonesia that is seen widely as the market leader in the country. Tencent Holdings Ltd invested around US$100 million to US$150 million in Go-Jek, sources said earlier this month.

"We are delighted to deepen our strategic partnership with Didi and SoftBank", said Anthony Tan, Grab's group chief executive and co-founder. "We're encouraged that these two visionary companies share our optimism for the future of Southeast Asia and its on-demand transportation and payments markets, and recognise that Grab is ideally positioned to capitalise on the massive market opportunities".

Grab's latest fundraising round comes at a time when US -based Uber is struggling from myriad issues: Those include an intellectual property fight with Waymo, Google's self-driving auto program, scrutiny into its workplace culture, a criminal probe over a software that helped drivers evade local transportation regulators and the search for a replacement for former CEO Travis Kalanick. Didi, which bought Uber's China business in August 2016, first invested in Grab back in 2015 in its first step toward establishing what became known as the global anti-Uber alliance - a knowledge-sharing coalition that consisted of Didi, Grab, India's Ola and Lyft.