Grab vanquishes Uber with local strategy

Bloomberg

As Uber Technologies Inc. looked to conquer ride-sharing around the world, Grab was focussed on serving the 620 million people that share its home in Southeast Asia.
Helped by the deep pockets of SoftBank Group Corp., Grab emerged the winner when Uber agreed to swap its business in the region for a 27.5 percent stake. The deal is a vindication for co-founder Anthony Tan’s strategy of tailoring services to local needs and working with incumbent taxi operators instead of against them.
With $4 billion raised from investors led by SoftBank, Tan has turned Grab into a ride-hailing juggernaut since it was born in a tiny Kuala Lumpur storage room about six years ago. Rich funding has helped him lure top talent and survive through the losses generated by a fierce battle with Uber to win over customers. Now the 36-year-old Harvard grad, who spurned the family’s automotive empire in Malaysia to strike out on his own, has emerged stronger as he turns to his other significant competitor in the region, Indonesia’s Go-Jek.
“Anthony is a great leader, someone that I’ve learned a lot from,” said Jeremy Kranz, head of the technology investment group at GIC Pte, Singapore’s sovereign wealth fund.
The deeply religious Tan, who still attends Bible study classes, started Grab in his native Malaysia. With Harvard classmate Tan Hooi Ling, he kicked off operations for what was then known as MyTeksi in Kuala Lumpur, allowing users to book cabs.
Grab later relocated to Singapore and now provides a host of services from Indonesia to Vietnam and the Philippines.
The company is valued at $6 billion by CB Insights, making it the most valuable startup in Southeast Asia.
Along the way Grab has been picking up talent, from engineers to product developers, as its funding helped woo them from household names in the technology world.
“In Southeast Asia, one of the most difficult things to build is tech talent,” Tan said. “We’ve been able to build tech talent from Google, Facebook, Twitter, Microsoft. We’ve been very blessed. With that, we could build great products.”
That includes Ming Maa, a former executive at Goldman Sachs Group Inc. and SoftBank, who was hired as group president in 2016 and oversees Grab’s fundraising, mergers and acquisitions and other strategic issues.
Still, it’s not a clean victory. Go-Jek remains a potent rival, particularly in Indonesia as it moves beyond just ride-sharing to real-world service such as food delivery and hairdressers on demand. Also, the US company is getting a bigger slice of Grab than it did when it sold out in China.
Uber got less than 18 percent of Didi Chuxing in that deal, although it did get 36.6 percent of Yandex when it retreated from Russia. To some, Grab’s victory may also have been the result of pressure from SoftBank to consolidate a global ride-hailing empire and whittle down losses. “After investing $700 million in the region, we will hold a stake worth several billion dollars and strategic ownership in what we believe will be the winner in an important global region,” Uber CEO Dara Khosrowshahi said.