Southeast Asian ride-hailing app Grab is investing into more compact regional startups as it strives for expansion into other areas in the region.
Nikkei Asia reported Chris Yeo, the head of Grab's investment subsidiary Grab Ventures, revealed the fact through an interview. Grab aims to make two to four "strategic" investments in different startups per year.
Companies in its target include Series B firms or those with higher fundraising stages. Most of these deals are set for minority stakes. In a separate move, Grab is also looking out for other acquisitions which can help its business.
Grab's Yeo explained the reason behind the investments is to foster "synergies" with the business they already have. He said that it isn't like any investment, though; it must make sense financially, but they are considering other factors and not just the financial sense, he continued.
As companies like SoftBank seeks to expand globally, Grab is focusing on its strategy of becoming the dominant ride-hailing app in the region. It has since expanded to include other services such as digital payments and food delivery with its Grab Food and Grab Transport expansions.
Softbank has funneled some of its international funding into Grab-some $2 billion worth of it. Grab, in turn, will use the investment from Softbank into Indonesia over the next five years, according to CNBC. Grab has said their target is to expand to wider regions in Asia, and the investment is to help speed up the setup of Indonesia's digital infrastructure.
This included the construction of a next-gen "transportation network" to pave the way for more electric vehicles in local cities. The setup is also meant to help health care and other important services to be delivered in a timely way in the country.
The chairman and CEO of SoftBank, Masayoshi Son, praised Indonesia's tech sector, saying that it had "huge potential." He added that he was very happy to be investing $2 billion into Indonesia's digital future through Grab's efforts.
Grab has also started making its mark in Vietnam and Malaysia because the company saw "potential opportunities" into these countries. Already, Grab has targets into which they will let their investments flow: financial services, food, logistics, mobility, and technologies like AI and machine learning.
Grab received Uber Technologies' shares in the business in early 2018. It launched Grab Ventures for the facilitation of more investments into startups and to cultivate companies in their early stages in the region.
