FinTech: Grab Seeks To Raise From $300 To $500M For Fintech Thrust
The South-East Asian conglomerate is in talks to raise the money for its fintech unit.
According to a Reuters Exclusive report, Grab, which has evolved from being a ride-hailing cab operator to a multi-business conglomerate, is looking for funding in the range of $300 million to $500 million. Reuters’ sources said the company is in advanced talks with investors such as Prudential plc (LON: PRU), AIA Group Ltd (HKG: 1299), and others. (News18)
Grab to fund its fintech unit
Grab’s fintech unit is likely to enter the funding with a pre-money valuation of $ 2 billion, with insurers taking up about half of the total funding under discussion.
Grab has expanded its horizons from its original avatar of a ride-hailing business. It describes itself as an “everyday-everything” app and its activities span transportation, food delivery, courier services, , groceries and retail, and hotels. Its financial services include payment processing, rewards and gifts, insurance, and lending.
It has also launched GrabInvest, a wealth management solution.
Technology companies that have a digital and consumer-facing business model have seen a boom in demand for the services due to the COVID 19 epidemic.
Due to this reason, Grab, which ranks as Southeast Asia’s most valuable start-up and worth $ 14 billion, is unlikely to face any hiccups in funding.
Though Grab’s transport business has suffered from the pandemic, it’s groceries and food deliveries business has soared.
“Finalising new funding during these times could also help Grab in its sales pitch for the Singapore banking license,” said one of the people to Reuters.
Thrust on financial businesses
Last year, Grab applied for an online banking license together with Singapore Telecommunications Ltd (SGX: Z74).
It also raised about $ 850 million from investors such as Mitsubishi UFJ Financial Group (NYSE: MUFG).
The amount was planned for creating accessible and affordable financial services for Southeast Asia to boost financial inclusion in the region
MUFG and Grab also planned to launch a financial “super-app” and to develop next-generation financial products and services.
It is likely that insurers such as Prudential and AIA, which run substantial operations in Asia, would be able to market their products through Grab once they come on board as investors in the fintech unit.
Meanwhile, the company’s flagship app has already garnered 198 million downloads.
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