Grab Takes The Fight to Go-Jek’s Home Turf with US$ 2 Billion Investment
by Fintech News Indonesia July 29, 2019Grab announced today it will invest US$2 billion into Indonesia over a period of five years with the capital invested by SoftBank, to accelerate the development of the country’s digital infrastructure.
The investment will go towards creating a next-generation transportation network for cities and transforming how critical services, like healthcare, are delivered.
The initiatives were announced after a meeting between Indonesia’s President Joko Widodo, Masayoshi Son, Chairman & CEO of SoftBank Group, Anthony Tan, CEO of Grab and Ridzki Kramadibrata, President of Grab Indonesia, at the Merdeka Palace in Jakarta.
SoftBank, which invested US$1.46 billion in Grab earlier this year, will seek to grow its presence in Indonesia. To play its part in helping Indonesia achieve this ambition, SoftBank will invest the US$2 billion into the country through Grab, to drive the digitization of crucial services and infrastructure.
Grab and SoftBank will invest to create a next-generation transport network for Indonesia based around an electric vehicle (EV) ecosystem that will drive cities toward a greener and cleaner transportation grid. Both companies will also develop geo-mapping solutions for Indonesia, in order to drive the country’s development and adoption of future technologies.
Grab will also launch affordable e-healthcare services in Indonesia, within the next three months, aiming to increase access significantly to doctors and medical services for all Indonesians.
As part of Grab’s long-term commitment to Indonesia, the company also announced plans for a second headquarters in Indonesia. It will house Grab’s rapidly growing R&D centre in Jakarta and will be the dual headquarters for the GrabFood business, which it claims is the largest food delivery provider across Southeast Asia.
Grab’s second headquarters will serve the unique needs of customers in Indonesia, and focus on developing solutions that empower micro-entrepreneurs, like Grab-Kudo agents. Relevant solutions will be introduced to other Southeast Asian emerging economies.
Masayoshi Son, Chairman & CEO of SoftBank Group said, “Indonesia’s technology sector has huge potential. I’m very happy to be investing US$2 billion into the future of Indonesia through Grab.”
Anthony Tan, CEO of Grab, said, “With our presence in 224 cities, Indonesia is our largest market and we are committed to long-term sustainable development of the country. We are delighted to facilitate this SoftBank investment, as we believe by investing in digitizing critical services and infrastructure, we hope to accelerate Indonesia’s ambition to become the largest digital economy in the region and improve the livelihoods of millions in the country.”
Since 2017, Grab has invested over US$1 billion into Indonesia through its Grab 4 Indonesia 2020 master plan, and its commitment to invest into Indonesian startups. Grab aims to double the number of micro-entrepreneurs in the country in five years, up from the 5 million created so far, with this additional US$2 billion commitment to Indonesia.
While much of this announcement is centered largely around transportation, food delivery and e-healthcare, much of this will play a big role in creating an ecosystem for it to compete against Go-JEK on a more equal footing.
Ever since Anthony Tan announced Grab’s fintech ambitions with Grab Financial in March 2018, he has made it clear that Indonesia is one of their primary markets. They reaffirmed that in March 2019 when they announced that they will be doubling down on their insurtech initiative in Indonesia.
As recent as November last year GO-JEK has also made similar announcement in taking the fight to Grab’s home turf, although they have not laid out specifically an investment commitment as Grab did with this announcement.
