Grab will no longer just be a ride hailing service. Based on their appetite for growth and the companies they have been acquiring, Grab will morph into payments, fintech and e-commerce.
The hidden agenda – e-commerce
Grab (Singapore-based ride-hailing service) agreed to acquire KuDo, an Indonesian online payment startup firm. Grab said it will integrate the KuDo team and platform with its own proprietary mobile payments platform, GrabPay. Grab did not disclose the deal value. This is a move to side step competition with Uber for rides. Grab’s appetite for growth is definitely growing beyond dominating ASEAN’s ride railing sector.
Who are they acquiring?
KuDo Technology Indonesia, LLC is an online-to-offline e-commerce platform that allows Indonesian consumers to shop online through its network of more than 400,000 authorised agents across the country. Grab said it plans to leverage KuDo’s network to bring in more riders, drivers and GrabPay users. The company will also explore opportunities to grow Kudo’s financial services offerings.
KuDo installs and operates kiosks at malls, universities, office buildings, and convenience stores for enabling customers to shop online for game vouchers, discount vouchers, cellphone balances, and others without having to use credit cards. The company was founded in 2014 and is based in Tangerang, Indonesia.
The deal is move acquiring Indonesian O2O e-commerce. Afterall, Grab will not immediately commit to competing with Lazada. The cash burn rate will be too higher for its investors. But this deal will immediately provide Grab with more than 400,000 merchants. Grab’s wild card, GrabPay will now be accepted immediately over just less than half a million merchants. Talk about financial inclusivity – Grab can be used by merchants for top ups, transfers, remittances within ASEAN region.
Growth beyond payments and ride hailing
Growth will not stop there. We already know that KuDo installs kiosks across all micro retail businesses. We can expect GrabPay to be a dominant force for payments in Indonesia. KuDo also enables customers to purchase vouchers, cellphone credits, all without the use of credit cards.
Just a week before this announcement, Grab shared that they will raise more than US$1.5 billion in a new round of funding backed by SoftBank Group. It is now clear why they are raising this gigantic amount of money.
In a nutshell, Grab has sights for fintech payments, remittances, e-commerce, and more. It is more likely for Grab to think about disrupting financial sectors in ASEAN through lending, deposits, payments, prepayments, then for Grab to combat technologically savvy e-commerce giants such as Lazada and new global entries, Amazon and Alibaba.
Watch this space. Grab will morph beyond ride hailing. They have reached an equilibrium with Uber in Singapore and have stronger understanding of the ASEAN markets given that Grab is an ASEAN domiciled firm. Perhaps, in the next 5 years, we can bank with Grab, lend and borrow through Grab, buy and top up phone credits through the current ride hailing firm.