Grab Announces $850 Million Fundraise Amid Rumours of Merger with GoJek
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Singapore’s Grab on Tuesday said it has raised over $850 million from Japanese investors, including Mitsubishi UFJ and TIS, to mainly enhance the ride-hailing company’s digital payment infrastructure in Southeast Asia and Japan.
Earlier in the day, there were media reports that Grab and GoJek - two of the region’s biggest ride-hailing and food delivery companies, were discussing a merger to create one of the world’s most highly-valued startups.
The media reports cited independent reporting by a news website called The Information, which cited people familiar with the matter as its source.
The two firms have held talks over the last two years, and the discussions have grown serious the last couple of months, the Information's report said.
Terms of the merger, and a dispute over who would control the combined entity has delayed a final agreement, with Gojek allegedly wanting a 50-50 deal, while Grab looking to come away with a significant majority, the report added, citing unnamed sources.
GoJek has denied the media reports in a statement to Entrepreneur Asia Pacific, saying "there are no plans for any sort of merger and recent media reports regarding discussions of this nature, are not accurate."
Grab did not immediately respond to Entrepreneur Asia Pacific’s request for comment.
The price war between Singapore’s Grab and Indonesia’s GoJek to capture new users has come at the expense of margins, and both companies have been facing pressure from stakeholders to show a path to profitability.
A deal would help the companies solidify their stronghold in the region, and even potentially monopolize the market since they are currently the ones that dominate the space.
“In our view, a Grab/Gojek merger could significantly accelerate both companies’ paths to profitability, creating significant value for investors,” said Asad Hussain, Pitchbook’s mobility analyst.
The merger would also create the third-largest ridesharing company in the world by market valuation after Uber and Didi Chuxing.
“Although the companies do not currently compete directly with Uber, a Grab/Gojek merger has the potential to create a formidable future global competitor to Uber as the combined entity may seek to expand beyond Southeast Asia into Uber's core markets,” Hussain added.
Grab was last valued at $14 billion, while GoJek is valued at $9 billion.