As part of its continued initiative to become the “everyday app” for Southeast Asia’s local marketplace, Grab is reported to be looking to some big players to help expand its financial services segment.
Originally a ride-hailing startup out of Singapore, the firm, which acquired Uber’s regional business last year, is now facing some heavy competition from Southeast Asia local Go-Jek, according to TechCrunch.
The article said that, as digital spending is expected to triple in the region by 2025, the payments ecosystem is ripe with competition and Grab wants to stay on top of, and even expand, its current market share. To accomplish this, the company is looking into a spin-off of Grab Financial Group (the entity that manages GrabPay and other financial ventures that include insurance and loans) into an individual operation.
TechCrunch reports the company is currently in talks with PayPal and Ant Financial as potential investors for the initiative, though PayPal declined to comment for the article and Ant Financial denied that the companies were in talks.
Grab announced last week that it had broken ground on a new headquarters in Singapore that would accommodate up to 3,000 employees as well as a research and development center.
Grab Financial Group also announced a “Grow with Grab” initiative last month, launching lending and insurance services for its drivers in Singapore. The roadmap for the program includes other financial services, such as installment payments and an online checkout payment method, for eligible micro and small businesses, the company said.
“We are doubling down on our financial services offering for micro-entrepreneurs with ‘Grow with Grab,’” Reuben Lai, senior managing director, Grab Financial Group, said in the announcement.
“This is a huge untapped opportunity for Grab Financial to support the region’s entrepreneurs who are less able to access traditional financial institutions. While SMEs contribute more than 50% of ASEAN’s GDP, two thirds of SMEs cite business funding and financing as their biggest problem. The Grab app has served more than 9 million micro-entrepreneurs over the last 6 years. As a result, we can leverage our scale and data insights to bring financial services products to market at a more competitive price point than anyone else,” he said.