For the past few years, tech decacorn Grab has positioned itself at the forefront of fintech trends in Southeast Asia. With a valuation of over $16 billion USD, it is the region’s first “decacorn”, attracting investors’ eyes from all over the world. It has grown into a super app since its founding in 2012, providing all sorts of services for Southeast Asian consumers. In recent times it has begun to focus on developing the fintech side of the business. We dive into how this has taken place, and what part Grab will play in the future of fintech in Singapore.

Grab’s most recent investment comes in the form of a $300 million USD round of funding led by South Korean firm Hanwha Asset Management, following a $2 billion USD valuation of Grab’s fintech sector. Other investors in this particular development field include US-based and initial Grab investors GGV Capital, and Singaporean K3 Ventures. New investors include Flourish, eBay founder Pierre Omidyar’s fintech investment firm. 

Investment history

While the interest in the region is evident, the worldwide health crisis has inevitably boosted these rounds of investment. Reuben Lai, Senior Managing Director at Grab Financial Group (GFG), said that the pandemic “accelerated the need for digital financial services” and that Grab was able to “draw upon the expertise of top investors”, as they work towards “financial inclusion in the region.” 

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Furthermore, Yong Hyun Kim, CEO of Hanwha Asset Management, stated that GFG expects to “continue its exponential growth” with its “highly synergistic relationship with Grab” – a significant factor of this growth. He continued that Hanwha is pleased to be an “enabler of financial services to the underbanked and unbanked population in Southeast Asia” through its work with Grab.

GFG’s past investments include a significant injection of $856 million USD from Japanese investment firms such as Mitsubishi UFJ Financial Group and TIS Inc. This investment is now evident in the array of financial services that Grab now offers its 187+ million users spread across eight countries.

Fintech services

GFG attracted investors’ attention after launching competitive fintech services like eWallets and payments, travel insurance, and, most recently, a wealth management platform. Its latest feature is AutoInvest, the first retail wealth management product where users can invest small amounts of money with every transaction they make in the Grab ecosystem. While they will not become super-rich due to the small transaction amounts involved, users will be able to pay for their day-to-day needs with the money invested in their GrabPay wallet. 

This new financial service helps fuel the Grab platform, making the app more robust and encouraging consumers to save and invest their money. Currently, Autoinvest has doubled GFG’s users as of December 2020 and has achieved a 40% revenue growth from 2019 to 2020, indicating the popularity of the idea amongst the public.

Another promising arm of GFG is its insurance service. Since its launch in April 2020, Grab has tied insurance into its ridesharing product, resulting in a growth spurt four times that of its initial user base of 4.5 million. 

Future plans

While GrabPay has been vital for streamlining the processing of the super app’s payments over the years, the tech startup has now set its sights on earning a slice of the digital banking pie. By partnering with one of Singapore’s top telecommunications firms, Singapore Telecommunications Limited (Singtel), Grab obtained a Singaporean government license to run a digital bank in December 2020. The Singtel-Grab partnership is both promising and a threat to existing banking services, as both companies boast a large customer base and a strong background in technology. 

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Grab’s CEO and co-founder Anthony Tan said that the two companies’ experience in taking care of Singaporeans’ everyday needs, combined with their data-driven insights and deep tech expertise gives them the potential to create a digital bank that allows them to empower even more customers to take control of their money and “achieve better economic outcomes for themselves, their businesses and families.” 

Finally, rumours of a Grab IPO in the USA have been ever-present alongside talk of a merger between the Singaporean-based firm and its Indonesian rival Gojek. An IPO in the United States could end up raising over $2 billion USD, sources close to the matter said.  

By expanding and evolving its fintech in Singapore and the ASEAN region, tech decacorn Grab solidifies its position even more with every investment round. Whether these financial moves are en route to establishing a monopoly in the digital banking sector and in-keeping with other fintech trends in Southeast Asia or not remains to be seen. Whatever the case may be,  the message is clear: there is a market of almost a quarter of a billion people in the region, and Grab is taking giant steps to cater to their every need.