Toyota to invest $1 billion in Grab

Image via ABS

Image via ABS

Toyota Motor Corporation has just announced that its alliance with Grab Holdings, Inc. has been strengthened with a $1 billion investment (110 billion yen).

The deal comes as the auto industry faces a spike in the need for technological prowess with the advent of features such as autonomous driving, while app makers offer passengers the option to forgo vehicle purchases by connecting them with drivers.

Automakers are taking steps toward a future where mobility services will make individual car-ownership less necessary, while trying to fend off technology giants targeting the same market.

Prior to this, Toyota has also invested in Grab (and its former rival Uber).

Carmakers and technology companies alike are working toward a future where autonomous robotaxis will lessen the need for individual auto ownership.

At Toyota, President Akio Toyoda is working to turn the 81-year-old auto giant his grandfather founded into a mobility-services provider.

Toyota's Grab investment is double the $500 million that GM poured into ride-hailing company Lyft in 2016.

The Singapore-headquartered firm did not disclose how much fresh capital it aims to raise. The quickly-growing scooter company is making waves this week after news broke that it's seeking to raise another $200 million at a $2 billion valuation. The company's app has been downloaded onto over 100 million mobile devices and the firm logs over 6 million rides per day.

Toyota's investment will allow Grab, which counts peer Didi and Japan's SoftBank Group Corp as investors, to further expand its range of online to offline services, such as food delivery and digital payments, deeper into the region. The company announced last week that it launched an investment arm called Grab Ventures to contribute to the growth of Southeast Asia's promising, yet underfunded early-stage startup scene. This strong partnership will enable us to become the one-stop mobility platform in Southeast Asia. A Toyota (tm) executive will be appointed to Grab's board, and another Toyota employee will be seconded to Grab to as an executive officer, the carmaker said Wednesday. "Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia", Shigeki Tomoyama, Toyota executive vice president and president of Toyota's in-house Connected Car Company, said.

Toyota has agreed to invest US$1 billion in Grab, becoming a lead investor in the latter's ongoing financing round, subjected to closing conditions. Grab recently took over Uber's Southeast Asia operations after years of competition, and is now going head-to-head in Indonesia with rival Go-jek.

Grab's main rival is now Indonesia's Go-Jek which last month said it would invest $500 million to begin expanding overseas.

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