To boost growth amid stiff competition in Southeast Asia, Grab has been mulling spinning off its financial services business and raising capital for it separately.
Singapore-based technology company Grab, which was reportedly in talks to spin out its financial services business, has mandated a few banks to attract investors to take minority stakes in its financial business, «Reuters» reported, citing two people familiar with the matter.
The wire service reported, citing an undisclosed source, that Grab was looking to raise less than $500 million through its spin-off, with banks and insurance companies among potential investors, though the plan is still in an early stage.
In March, finews.asia reported Reuben Lai, Senior Managing Director, Grab Financial Group, as saying the firm's ambition was to become the region’s largest payments and financial services platform in 2019.
«Cash Cow»
«If we spin out these operations it isn’t just about faster growth, it is to give them more autonomy to capture the opportunity. Financial services are a cash cow,» a person familiar with the matter was quoted in «The Financial Times» (behind paywall) as saying.
According to the publication, investors including family offices and venture capital firms have already been approached about putting their money into Grab's two separate arms.
Grab dominates the ride-hailing industry in Southeast Asia, where it operates in eight markets. It has been valued at $14 billion after its latest funding round in March 2019, when it raised $1.5 billion from Japan's SoftBank Vision Fund.
