Southeast Asia’s ridehailing firm Grab will invest $500 million in Vietnam over the next five years to expand its transport, food delivery, and payments network in the country, the company said Wednesday.

It is also seeking new opportunities in the wider mobility and logistics industry, signing a “comprehensive strategic partnership” with Sovico Holdings, a Vietnam conglomerate with more than 20 subsidiaries across aviation, finance, and banking, real estate, and hospitality. Further details of the partnership were not available at press time.

Grab first entered Vietnam in 2014 and, by the end of this year, will already have invested more than $200 million in the country, according to its Vietnam country head Jerry Lim.

One reason for investing a lot more is the strong growth it is seeing in Vietnam in the first half of the year, it said.

The company claims that total payments volume on the Grab app via its payments partner Moca grew 150 percent in the first half, while monthly active users grew more than 70 percent in the same period.

GrabFood saw sales in the first half grow 400 percent, with average daily orders hitting 300,000.

Grab drivers in Vietnam have accumulated earnings of nearly $1 billion to-date, it said.

“This investment is a reflection of our redoubled commitment to Vietnam,” said Russell Cohen, Grab’s head of regional operations. “The country’s rapidly developing economy and young, mobile-first population makes it ripe for the adoption of digital services.”

Rivals Aplenty

Grab clearly wants to strengthen its gains that are hugely due to the exit of Uber out of Southeast Asia last year. But it still faces competition in Vietnam including from its biggest rival Go-Jek, which entered the market last year with Go-Viet. Even though Go-Viet only focuses on bike-hailing and food delivery currently, it will only be a matter of time before the Indonesia-based company expand its services in Vietnam.

Also chipping at the pie are local startups that came in after Uber’s exit, notably FastGo and Vato.

According to The Saigon Times, FastGo has the second largest number of customers in Vietnam after Grab. Since its launch in June last year, it has expanded its reach into 10 cities/provinces across the country, with more than 40,000 drivers.

FastGo has also made its first overseas foray, entering Myanmar in December last year, according to the report.

Vietnam’s transport company, PhuongTrang Tourism Service and Transport, meanwhile, invested $100 million in local ridehailing startup Vivu early last year, rebranding it to Vato.

In a statement, Grab said it aims to expand to 63 cities/provinces nationwide and empower millions of Vietnamese be micro-entrepreneurs, including drivers, delivery partners and merchant partners. It will also tie up with financial institutions to provide financial services such as credit access and insurance products to micro-entrepreneurs and small business.

It said it would grow its R&D head counts in Vietnam and “invest in building Vietnamese tech talents that can solve the biggest challenges in Southeast Asia using artificial intelligence, big data, machine learning and more.” This is in line with a key area of Vietnam’s Socio-Economic Development Plan 2020, whereby the country aims to have one million workers who are highly proficient in digital technologies by next year, Grab said.

It also vows to support Vietnam’s tech startup ecosystem through its flagship GrabVentures program. Vietnam aims to create 10 technology unicorns by 2030, aside from getting 65 percent to 70 percent of its population to be digital and financial literate.

The country is also encouraging new technologies, business models and products/services that are environmentally friendly. In this, Grab sees opportunities such as shifting users from private vehicle ownership to shared transport modes like GrabBus, a marketplace for bus travel that will cater to mass market consumers.

“As we scale our food, parcel delivery, transport and payments business across the country, we hope to tap and invest in new opportunities emerging in the fin tech, mobility and logistics space, in order to bring about greater value and innovation for our customers and partners,” said Cohen.

Photo Credit: You've got parcel. Grab Vietnam. Grab Singapore