Citing two sources with knowledge of the talks, TechCrunch said that Grab was in “early discussions” with the two major payment operators about potential strategic investments that would see Grab Financial Group spun out of Grab’s core business.
This time last year, Grab acquired rival Uber’s Southeast Asian business in exchange for Uber getting a 27.5% stake in Grab, but despite its extended reach in the region, the company has found itself increasingly challenged by Indonesia-based Go Jek.
Shifting more of its focus to non-transportation streams of revenue would help Grab in its drive to become the “everyday app” for consumers in Southeast Asia, where digital spending is expected to reach at least $200bn by 2025.
TechCrunch also reported that Grab has held talks with Alibaba in the past, but that backing Grab Financial “might make more sense” for the Chinese e-commerce player because a deal would align with Ant Financial’s expansion in the region.
According to TechCrunch’s sources, a spin-out could occur in the coming months, although Ant Financial denied it was involved in talks with Grab, while both Grab and PayPal declined to comment on “speculation”.
The development came in the same week that Line, the popular Asian messaging app, confirmed that it planned to expand into e-payments and other fintech services, and in the same month that Grab Financial announced that it would roll out a range of financial services across Southeast Asia.
Aimed largely at entrepreneurs and small businesses in the region, the company stated that its “Grow with Grab” initiative marked its “full-scale push into lending and insurance”.
“This is a huge untapped opportunity for Grab Financial to support the region’s entrepreneurs who are less able to access traditional financial institutions,” Reuben Lai, senior managing director of Grab Financial Group, said at the time.
“We can leverage our scale and data insights to bring financial services products to market at a more competitive price point than anyone else,” he added.
Sourced from TechCrunch, Grab; additional content by WARC staff