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Southeast Asia’s Grab said Japan’s Mitsubishi UFJ Financial Group Inc (MUFG) and IT services firm TIS Inc have agreed to invest a combined $856 million in the ride-hailing firm, as it seeks to expand aggressively into financial services.
MUFG, Japan’s biggest bank by assets, has agreed to invest $706 million, the companies said in statements on Tuesday.
“MUFG’s investment into Grab is a vote of confidence in our super app strategy and our ability to build a long-term, sustainable business,” Ming Maa, Grab’s president, said in a statement on Tuesday.
Grab, backed by SoftBank Group Corp, said it will use the funding to offer lending, insurance and wealth management products and services for Southeast Asian consumers and small and medium-sized enterprises.
MUFG’s deputy president and incoming CEO Hironori Kamezawa said the bank will combine Grab’s advanced technologies and data management expertise with its financial experience. “We believe that this alliance will also generate additional momentum for our ongoing digital transformation of MUFG,” he said.
Separately, Grab also said that TIS Inc, part of TIS INTEC Group, is investing $150 million in the company.
Given a low interest rate environment at home, Japan’s MUFG has focused on boosting its Southeast Asian business by acquiring stakes in some of the lenders in the region.
“Japan’s progress on the digitization of banking and other fintech lags that of other advanced countries,” S&P Global Ratings associate director Shoki Nagano said in a report.
“Banks must make sufficient investments in new technology, establish flexible and adaptive management suitable for fast-changing environments.”
Grab and Indonesia-based rival Gojek are evolving from ride-hailing app operators to become one-stop shops for services as varied as payments, lending, food delivery, logistics and hotel bookings in Southeast Asia.
In Singapore, Grab has teamed up with Singapore Telecommunications (Singtel) and applied for an online banking licence in the country.
On Monday, The Information reported that Grab and Gojek are discussing a merger. Gojek said in an emailed statement to Reuters that there are no plans for any sort of merger and recent media reports regarding discussions of such a nature are not accurate.
Grab declined comment when contacted by Reuters.
(Reporting by Anshuman Daga in Singapore and Takashi Umekawa in Tokyo; Editing by Muralikumar Anantharaman and Christopher Cushing)
This article was written by Takashi Umekawa and Anshuman Daga from Reuters and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to email@example.com.