Grab raises $2B from China's Didi and SoftBank to take on Uber

Earlier this month there were reports about Grab raising nearly $2 billion from China's Didi Chuxing and SoftBank. The deal has finally happened. The Singapore-based company has secured $2 billion and is expecting to raise an additional $500 million from existing and new investors.

This new round is estimated to give Grab a valuation of more than $6 million, Reuters reported. That's more than double the $3 billion valuation that Grab commanded from its most recent round of funding in September 2016, when it raised $750 million.

“We are delighted to deepen our strategic partnership with DiDi and SoftBank. We’re encouraged that these two visionary companies share our optimism for the future of Southeast Asia and its on-demand transportation and payments markets, and recognize that Grab is ideally positioned to capitalize on the massive market opportunities,” said Anthony Tan, group CEO and co-founder of Grab.

The latest capital infusion for Grab comes at a time when its rival Uber, which has a significant Asia presence, is fraught with challenges related to its workplace culture, patent infringements, driver related issues among others.

Both Didi and SoftBank have long-standing relationships with Grab, formerly known as GrabTaxi. Didi, which bought Uber’s China business in August 2016, first invested in Grab back in 2015 in its first step toward establishing what became known as the global anti-Uber alliance — a knowledge-sharing coalition that consisted of Didi, Grab, India’s Ola and Lyft.

Grab currently operates in 36 cities across 7 countries and provides close to 3 million rides a day across South East Asia, according to the company. Grab, which also has funding from Uber investor Tiger Global, claims that it currently controls 95 percent of the taxi-hailing market and 71 percent of the ride-hailing market across the region. Grab also has GrabPay, a cashless top-up payments option, which they claim has grown more than 80 percent month on month since its launch in December 2016.