There aren't too many Billion-Dollar Unicorn stories from Southeast Asia. But here is an interesting story of Grab (GRAB), earlier known as GrabTaxi, that has successfully delivered an Uber-like offering in the region and now commands a multi-billion dollar valuation.
Singapore-based Grab was founded as GrabTaxi by Tan Hooi Ling and Anthony Tan. Malaysian by origin, Tang used to enjoy gadgets and was always interested in figuring out how things worked. She met co-founder Anthony Tan at Harvard Business School in 2012, and they decided to set up a company of their own.
The two narrowed down on the taxi business in Malaysia. After developing an app called My Teksi, the hard work began. Anthony was already well known in Malaysia because he is the grandson of an eminent auto tycoon in the country. But he started publicizing his app by going door-to-door to ask the biggest taxi fleet companies to try his product. The taxi operators weren't too thrilled by the product and dissuaded him from selling the app. But that did not stop him. At the fifth taxi stand, a small fleet of 30 taxis agreed to try him out. And since then, Grab hasn't stopped growing.
Since being launched, the GrabTaxi app has been downloaded onto 11 million mobile devices, and has 200,000 drivers in 28 cities across six countries - Malaysia, Singapore, the Philippines, Indonesia, Vietnam and Thailand. It also has diversified from being a car hailing app to adding services such as private car rides - GrabCar, motorcycle hailing - GrabBike, car-pooling - GrabHitch, and delivery service - GrabExpress.
More recently, the company also added services including the ability to make cashless payments and a service focused on corporate consumers. To keep all its services under a single umbrella, GrabTaxi renamed itself as Grab. It also is adding new features to its ride hailing service. For instance, the latest feature flash includes the capability to scan all available rides near a user location so that the user can select the one they wish to take based on expected cost and duration. Earlier this week, the company also tied up with NuTunomy, a Singapore-based company, to test self-driving cars in Singapore.
Grab does not disclose its detailed financials. It earns revenues by charging a commission of booking fees for each ride. The percentage varies based on the distance of the trip, the location and time of day. As part of introductory offers, Grab also does not collect fees from some of the newer markets. The company is expected to break even in most of its markets this year.
It has raised $1.43 billion so far in five rounds of funding from investors including Softbank, GGV Capital, Tiger Global Management, and the Singapore government's Vertex Venture Holdings. Its latest round of funding was held earlier this month when it raised $750 million in a round led by SoftBank Capital at a valuation of $3 billion. Prior to the round, in August Grab had raised $350 million at a valuation of $1.5 billion. The company is now facing serious competition from giants like Uber (UBER) that come into the region backed with bigger pockets. For now though, Grab claims to have the biggest share in the region. But regional analysts believe that there is enough room for the two in the countries since Uber focuses more on city dwellers while Grab focuses on the average town dweller.