Alibaba Group Holding and Grab Holdings Inc are currently discussing a partnership that would have the Chinese multinational tech group pouring at least $3 billion into the largest ride-sharing company in Southeast Asia.
Based on a Monday Bloomberg report, citing sources with information on the proposed deal, Alibaba Group will be the exclusive backer in the funding series and will shell out a considerable amount of the investment to procure stocks of Grab controlled by Uber Technologies.
Analysts said the agreement may constitute one of Alibaba's most valuable investments in the region since the Chinese conglomerate first bought stakes in international e-commerce group Lazada more than four years ago.
More important, the deal would give Alibaba Group access to Grab's massive fan base, electronics payment system, delivery logistics and scooter rentals.
The Queenstown, Singapore-based Grab operates in Vietnam, Cambodia, Japan, and four other geographical locations in the region. The company a 95 percent share of the ride-hailing market in 2017.
Alibaba has been shedding market share to Tencent-supported Shopee since acquiring a majority stake in Lazada. Analysts estimate Alibaba could take advantage of Grab's services to regain sales as competition with Shopee intensifies.
Grab has Softbank Corp among its roster of prominent investors. The ride-hailing firm is currently worth around $14 billion and expanded into mobile payments and financial services over the last few years – even before the coronavirus pandemic slammed its core ride-hailing operations, Reuters reported.
One of the strategies that Alibaba Group and Grab are planning to craft involves the integration of the latter's delivery operations into Lazada in order to allow the startup to benefit from a larger number of prospective customers, the sources disclosed.
