Grab Financial Group Secures $300M Series A Funding

Grab Financial Group revealed today that it has secured over $300 million in Series A investment. This funding round was spearheaded by South Korean investment company Hanwha Asset Management, and also included contributions from K3 Ventures, GGV Capital, Arbor Ventures, and Flourish Ventures.

As reported by the Financial Times, this investment establishes a $3 billion valuation for Grab Financial, which operates as a subsidiary of the prominent ride-hailing and delivery company, Grab. Both K3 Ventures and GGV Capital had previously invested in Grab when the company was initially established in 2012.

In February 2020, Grab previously announced $856 million in funding aimed at expanding its payment and financial services offerings. This announcement followed discussions and speculation regarding a potential merger between Grab and Gojek, a major competitor.

However, merger negotiations between Grab and Gojek ultimately reached an impasse. Gojek is now reportedly exploring a merger with Indonesian e-commerce leader Tokopedia. Bloomberg reports that the resulting combined entity could be valued at $18 billion, positioning it as a significant competitor to Grab.

Grab Financial Group stated in its funding announcement that its overall revenues increased by more than 40% in 2020 when compared to 2019. This growth was fueled by increased user engagement with services such as AutoInvest, a platform enabling users to make small, incremental investments through the Grab application, and various insurance offerings. Grab Financial introduced a range of financial products for both individual consumers and small and medium-sized enterprises (SMEs) in August 2020.

The adoption of digital financial services by both consumers and SMEs throughout Southeast Asia saw a rise during the COVID-19 pandemic. A report released in November by Google, Temasek, and Bain & Company indicated growth in the use of banking applications, online payments, remittance services, insurance products, and robo-advisor investment platforms in 2020. The region’s financial services market is projected to potentially reach $60 billion in revenue by 2025.

A partnership between Grab and Singtel was also selected as one of the recipients of a full digital-banking license awarded by the Monetary Authority of Singapore in December 2020.

Yong Hyun Kim, chief executive officer of Hanwha Asset Management, commented in a press release, “We anticipate GFG will maintain its rapid expansion, supported by a pioneering business model that aligns with evolving consumer lifestyles, as well as its strong synergy with Grab, the leading Southeast Asian unicorn.”