Ride-hailing major Grab announced that it has raised an $50 million strategic investment from Thailand-based KASIKORNBANK (KBank), at the same time, marking the entry of its payment arm into the Thai market, it said in an announcement today.
According to the startup, Grab Financial has secured an e-money licence in Thailand, and is officially now covering six key Southeast Asia markets – Singapore, Malaysia, Indonesia, Vietnam, the Philippines, and Thailand.
“In 2018, Grab Financial has established itself as Southeast Asia’s leading finch platform, both in terms of monthly active users and total payments volume. This partnership makes Grab Financial the first mobile payments platform to launch e-money-licensed payments services across ASEAN-6 and underlines the strength of our partnership-based strategy,” said Grab Financial senior managing director, Reuben Lai at a press briefing event today.
The strategic investment is also the first for Kbank in a company with core business out of Thailand. The round is part of a $3 billion ongoing funding round that Grab is seeking to close by year-end. It has raised over $2.7 billion so far, having just raised $250 million from automaker Hyundai Motor and its affiliate Kia Motors on November 7. Its valuation after that funding was believed to be around $11 billion.
KBank and Grab will jointly launch the ‘GrabPay by KBank’ mobile wallet in the Grab app which is targeted to launch as soon as early 2019. All QR-enabled merchants in Thailand will be to immediately accept ‘GrabPay by KBank’ upon activation.
Beyond the wallet, KBank’s K PLUS app will also integrate with the Grab app beginning 2019. On top of that, KBank will also work with Grab to jointly offer products to their customer base, including loans to help merchants grow their business and access to Grab for Business to improve corporate transport expense management as well as increase brand awareness and engagement through Grab’s advertising solution.
According to the Bank of Thailand, 68 per cent of all transactions in Thailand are carried out in cash, which costs the Thai economy millions of Baht each year.
“KASIKORNBANK has bold ambitions of becoming the digital bank of choice in the region. We look forward to developing innovative financial products together, which will put KBank in a position to tap into the rapidly growing digital economy across the region,” said KASIKORNBANK president, Patcher Samalapa.
Grab Financial was launched this March through a joint venture with Credit Saison to offer credit to the region’s unbanked. According to Lai, the payment arm has since grown 2.3 times in total payments volume and 3.5 times in monthly active users.
He said that the startup will look announce more partnerships in the payment space in the coming months. Grab currently has tied up with over 60 financial institutions and more than 500 partners in its rewards programme.
“We will want to continue to invest in our core payment infrastructure and continually making the cost of serving our customers as low as possible. We want to bring in the middle-40 customers which are very fragmented in Southeast Asia.
“We’re the first e-wallet to have presence in these six key ASEAN markets – it completes the picture that we’re the only wallet that covers all of these six ASEAN markets. Our ambition is to bring ASEAN closer with a single wallet. Our app has 125 million downloads in SEA, this means we have the lowest customer acquisition cost, huge consumer insights, trust and use cases,” said Lai.
He added that Grab Financial has been piloting micro-lending services in five ASEAN markets, although he declined to disclose which markets. Lai also declined to share the total amount of transactions that have been processed by GrabPay.
Here’s the timeline of Grab Financial’s growth since its launch in March 2018:
- March: Launch of Grab Financial through a joint venture with Credit Saison to offer credit to Southeast Asia’s unbanked and a partnership with Chubb to offer in-app insurance solutions
- May: Announcement of partnership with Malayan Banking Bhd (Maybank) to drive GrabPay in Malaysia
- June: Launch of GrabPay wallet in Malaysia; strategic partnership with Indonesian mobile wallet OVO and enabling OVO payments on the Grab app in Indonesia
- September: Strikes up strategic partnership with Vietnamese digital payment service provider Moca to launch ‘GrabPay by Moca’ wallet; receives e-money license from the Philippine central bank
- October: Partners with MasterCard to launch prepaid cards for the region
Also read:
Grab lands $250m from Hyundai and Kia, ups Series H round total to $2.7b
Malaysia’s transport minister clarifies Grab will not be banned