U.S. ride hailing leader Uber announced that it will be withdrawing from the Southeast Asia market. Singapore-based Grab Taxi, Southeast Asia’s largest ride hailing company, is acquiring Uber’s ride share and food delivery businesses in the region, the company announced.
In exchange, Uber will receive a 27.5% stake in Grab. Grab will also take over the Uber Eats operations in the region, in a transaction that appear to be modeled on Didi Chuxing and Uber China’s merger two years ago.
Today’s news marks Uber’s second major retreat from the Asian market. In August, 2016, Didi acquired all assets of Uber China, including its brand, business operations and data for operation within China. In exchange, Uber received a 17.7% economic interest in Didi.
What’s noteworthy is that Didi is already a major investor in Grab since the Chinese company agreed to lead a US$2 billion financing round in the Southeast Asia ride-hailing operator last July, at the time the largest financing round in the region.
While Uber is retreating from Didi’s home territory, Didi is rapidly expanding into Uber’s territory. In December, Didi was reportedly planing to expand into Mexico, and last July Didi announced that it had acquired Brazilian ride sharing operator 99 to expand in Brazil, the second largest market for rival Uber.
Grab said it is planing to build a dominant online-to-offline mobile platform for Southeast Asia. It will rapidly expand its existing GrabFood businesses in Indonesia and Thailand to two more countries, Singapore and Malaysia, following the integration of the Uber Eats business. GrabFood will be available across all major Southeast Asian countries in the first half of 2018.
Grab will also grow its core transport offering to include more localized transport services and new mobility solutions, in partnership with other transport providers and automakers. It will continue to enhance and expand its financial services offerings under Grab Financial, including mobile payments, micro-financing, insurance and other financial services, the firm said today.