China leads record-breaking $350 million investment in GrabTaxi hailing app
Wed 19 Aug 2015
Southeast Asian taxi-booking service GrabTaxi has obtained its largest round of funding to date, with China Investment Corporation (CIC) leading a small group of investors in a $350mn (£223mn+) investment.
The new round brings investment in GrabTaxi – now Southeast Asia’s largest cab-hailing service – to around $700mn since the company’s inception by Anthony Tan as MyTeksi in Malaysia in 2011 (and it retains that branding in the region) and its public launch in 2012. Previous investment rounds have included Temasek and Japanese Telco SoftBank Corps, who spearheaded a $250mn series D round in December of 2014.
CIC is a sovereign wealth fund investing foreign exchange reserves on behalf of the People’s Republic of China, and its last net valuation of assets put them at US$575.2bn (£366bn+). The other investors include Chinese taxi-hailer Didi Kuadi – who seem to prefer native competition to the aggressive incursion of Uber into the Asian hailing space – and Philippe Laffont’s hedge fund Coatue Management PLC*, a U.S.-based global investor in public equity markets whose recent interest in the Asian taxi market is counterbalanced by significant investment in Uber.
GrabTaxi runs at practically zero operating costs, since participating taxi drivers pre-pay determined amounts to gain commissions, from which GrabTaxi then deducts a 30% cut.
GrabTaxi operates in Thailand, Malaysia, Singapore, the Philippines, Indonesia and Vietnam. The app-based booking system uses Big Data first to identify metropolitan areas which are likely to originate the most requests for taxis – in order that its driver-members gather or dwell nearer there at times of peak demand – and thereafter operates in a similar manner to Uber, with the exception that the GrabTaxi brand works with existing licensed taxi companies in the host city, rather than enlisting private drivers. The company also operates bike-hire and private car-hire services under the GrabCar and GrabBike brands (with the latter especially popular in bicycle-obsessed Ho Chi Minh City in Vietnam).
With an app available on iOS, Android and the Blackberry 10 platform, GrabTaxi has taken greater pains to win friends and influence people than aggressively expansionist rival Uber. It operates a Provident Welfare Fund that rewards taxi drivers with good customer ratings, providing accident coverage, crisis support and medical cover for qualifying members. It is also currently operating a scheme wherein 70,000 full-time national and regular servicemen and women can receive subsidised rides by using a special token code that the company provides.
This latest injection has not led to a revised valuation of GrabTaxi, which the WSJ recently estimated [paywalled] at over $1.5 billion.
* As a side note, Coatue is the very embodiment of corporate anonymity, with an unrevealing site and zero presence on Wikipedia
