Grab, the southeast Asian ride-sharing company, is looking to spin off its financial services unit to double down on its non-transportation business, TechCrunch reported, citing sources familiar with the matter.
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Grab is in discussions with alibaba affiliate Ant financial and global payments company PayPal about a potential strategic investment, but the discussions are still in the early stages.
Grab, a seven-year-old company, bought Uber’s southeast Asian operations last year. Even so, the company has not monopolized the regional market since it was expected at the time.Instead, competitors are getting stronger. For example, Go-Jek, which is backed by investors such as Google and Tencent, is expanding from Indonesia to other Southeast Asian regions.
In response to growing competition, Grab is increasingly focusing on its financial services arm as a “day-to-day application” for consumers in south-east Asia. According to statistics, digital consumption in southeast Asia is expected to triple by 2025.
Grab Financial Group covers GrabPay services and several divisions, including insurance and loans. After divestiture, Grab Finance will operate independently of Grab’s core business. Although Grab finance after independence no longer enjoys the protection of Grab, it can establish important cooperative relations.
While Alibaba has invested in Grab, investing in Grab finance is more profound for Alibaba because it is in line with the company’s goal of promoting ant gold in Southeast Asia. According to a source, Grab may be divestiture of its financial services business in the coming months.
A related spinoff could emerge in the coming months, people familiar with the matter said.
Earlier, Deal Street Asia, the Singapore Investment News website, reported that Ant Gold and other financial ventures would invest in Grab’s financial business unit.
Spokespeople for PayPal and Grab declined to comment. An alibaba spokesman declined to comment.