Grab makes play for startups to expand foothold in S-E Asia

Singapore

GRAB is making a play for South-east Asian startups in a bid to further expand its foothold in the region, amid anti-competition probes after it announced last week that it will acquire rival Uber's regional business.

Through its new concept - Grab as a Platform - it will fund and support startups whose solutions have synergies with its various offerings, including transport, safety, payments and financial services. These startups will be able to tap Grab's platform to scale, such as by leveraging its user base or e-wallet tool for their own platforms.

Lim Kell Jay, head of Grab Singapore, told The Business Times in an interview on Tuesday: "We are actively looking at ways to support startups in South-east Asia. The goal is to build a unicorn within a unicorn."

Mr Lim said that Grab as a Platform was inspired by the ways of tech pioneers in Silicon Valley and China. "If we look back at how the Valley started, the Microsofts and IBMs paved the way for the next generation of companies. This is similar in China, with Baidu, Alibaba and Tencent."

"We are really blessed, in that we now find ourselves in the position of being among the first wave of tech startups from this part of the world, and bearing the responsibility of paving the way for the next generation of startups."

He noted that while Grab does not formally have a fund for investing in startups, it has made several investments, the newest of which he did not disclose. Previous known investments by Grab include Silicon Valley-based autonomous vehicle tech startup Drive.ai and Singapore-based bike-sharing company oBike.

GrabCycle, its marketplace app that unites bike and e-scooter sharing services on one platform, is the first venture to "plug into" the new concept, Mr Lim said.

GrabCycle was launched as a standalone app on Friday, with four partners - oBike, GBikes, Anywheel and Popscoot. Mr Lim said the company is open to supporting more of such ventures, into which it will invest "time and money".

Meanwhile, it will be responding to the Competition and Consumer Commission of Singapore (CCCS) on the latter's proposed interim measures to preserve competition in Singapore's ridehailing sector, said Mr Lim. The deadline for Grab to submit its response is Wednesday, a CCCS spokesman told BT.

The competition watchdog said on Friday that the Grab-Uber deal may have infringed the Competition Act.

Its proposed interim measures - which will effectively put a freeze on the deal until it has completed its investigations - include having Uber and Grab maintain independent pricing and product options as they were before the sale, and not take actions that could prejudice CCCS' ability, power and options to direct the divestment of business operations in the affected markets.

Asked if one proposed measure is for Uber to continue funding and running the Uber app in Singapore while CCCS investigates the merger (the Uber app was slated to be shut down on April 8), the spokesman would only say that CCCS will "determine the final Interim Measures Directions (IMD) after considering the written representations from the parties".

Thio Shen Yi, joint managing partner of TSMP Law Corporation, told BT that CCCS appears to have used a narrow market definition for the purposes of the IMD.

"While the ridehailing market is quite wide, as that can include street hails and private services, CCCS has started with a market definition that focuses only on ridehailing services booked through apps, a narrow one, but not wrong."

He added: "Disruption is becoming a fact of life. One of its effects is that it blurs the boundaries between markets. How markets are defined is important, and this is likely to be a precedent setting case."

The CCCS spokesman noted that the commission will consider ComfortDelGro and Go-Jek as part of its ongoing investigation. Both have been cited by observers as possible competitors of Grab after Uber's exit from Singapore.

Go-Jek, the Indonesia-based ridehailing app backed by Singapore's Temasek Holdings, is reported to be launching soon in Singapore as part of its first overseas expansion. Local taxi giant ComfortDelGro in December said it will buy 51 per cent of Uber's rental car subsidiary, Lion City Holdings, a deal that is still being reviewed by CCCS.

Lee Der-Horng, director of the NUS-LTA Transport Research Centre, told BT that he would not be surprised if ComfortDelGro forms a partnership with Go-Jek.

"They complement each other. ComfortDelGro has been trying to stay relevant in the private-hire car sector by collaborating with Uber and investing in Lion City. With the Grab-Uber deal and Go-Jek's launch in Singapore, ComfortDelGro will intuitively want to work with Go-Jek."

In turn, Go-Jek can leverage ComfortDelGro's local expertise and fleet to accelerate its take-off in Singapore, said Prof Lee. "If this happens, Singapore's ridehailing market will be a duopoly again, and not a monopoly, which is a worry of many people."

Asked how Grab plans to compete with Go-Jek and ComfortDelGro, Mr Lim said that it would bank on its "very local approach" and having its largest R&D centre sited in Singapore, which would render it "much closer to customers" and able to "make changes to the app more quickly".