PETALING JAYA: South-East Asian ride-hailing platform Grab, the company co-founded by Anthony Tan who is from the family that built up the TAN CHONG MOTOR group, is making a big bet on the Indonesian market with an investment of US$700mil over the next four years.
Indonesia is Grab’s largest market in South-East Asia, with its GrabCar and GrabBike businesses each growing more than 600% in 2016.
The investment under the company’s “Grab 4 Indonesia” 2020 master plan will see its services expand across more cities than any of its competitors, including Jakarta, Bali, Bandung, Padang, Makassar, Medan, Surabaya and Yogyakarta.
The master plan, designed to support Indonesia’s goal of becoming the region’s largest digital economy by 2020, includes the opening of a Grab research and development (R&D) centre in Jakarta.
The company also plans to launch a social impact fund to invest in local companies and improve access to mobile payments and financing opportunities across Indonesia, it said yesterday.
Anthony, who is group CEO and co-founder of Grab, is the son of Tan Chong Motor Holdings Bhd president Tan Heng Chew. His grandfather, Tan Sri Tan Yuet Foh, co-founded the Tan Chong group into a leading automotive company in the region.
“As the largest homegrown technology start-up in South-East Asia, we are excited to make this significant investment in Indonesia’s future and accelerate their transition to a fully integrated digital economy.
“The ‘Grab 4 Indonesia’ 2020 master plan underlines our deep commitment to driving South-East Asia forward, and our excitement about the tremendous opportunities we see in Indonesia to help build and advance the country’s digital infrastructure and ecosystem,” Anthony said in a statement yesterday.
The master plan involves three major investment pillars, which are technology talent, technopreneurship, and mobile payments.
To create new jobs in information technology and upskill the country’s human capital, Grab aims to hire 150 engineers over the next two years for a new R&D centre in Jakarta.
The company said the centre would focus on developing country-specific innovations, including algorithms to address new road regulations in Jakarta and GrabHitch (Nebeng), a “bike-pooling” service that caters to almost 1.4 million commuters in greater Jakarta.
Indonesian engineers will also be provided with training opportunities at Grab’s existing R&D centres in Singapore, Beijing and Seattle.
The company also plans to pump US$100mil into local start-ups and aspiring technopreneurs through a “Grab 4 Indonesia” social impact investment fund.
It said the fund would focus on companies involved in the mobile and financial services industries, particularly those which serve smaller cities and communities which have yet to benefit from the digital economy.
To increase access to mobile payments and financing opportunities, the company will expand its mobile payment solutions in Indonesia through its cashless stored value option, GrabPay Credits, and existing partnerships with Mandiri and their e-Cash solution, it said.
“In addition, Grab will provide its driver partners with access to more financing opportunities to purchase their own smartphones and automotive vehicles, giving them the opportunity to build sustainable livelihoods and become micro-entrepreneurs,” it said.
To date, Grab has generated over US$260mil in income for its driver partners in Indonesia.
Bloomberg quoted Grab president Ming Maa as saying that the bulk of the investment into Indonesia will come from Grab’s fund-raising exercise last year, during which the company collected a record US$750mil from backers led by SoftBank Group Corp.
Ming Maa said there were no plans for a new financing round, but expects the company to exceed the estimated US$700mil investment figure “very quickly”.
Grab is currently estimated to be valued at more than US$3bil.
According to the report, Grab’s investment into Indonesia is set to further intensify the company’s stiff competition with its biggest competitors, Uber and Indonesia’s Go-Jek.
Go-Jek remains the top ride-hailing app in Indonesia as of December 2016, followed by Grab and Uber, based on App Annie’s estimates of active monthly users on Android phones.
Since the start-up’s launch in 2012, Grab has evolved into the largest ground transportation app in South-East Asia, with over 630,000 drivers and 33 million downloads across the region.