Southeast Asian ride-hailing platform Grab has launched a plan to invest $700 million in Indonesia over the next four years to support Indonesia’s goal of becoming Southeast Asia’s largest digital economy by 2020.
The “Grab 4 Indonesia 2020 master plan” – endorsed by Badan Koordinasi Penanaman Modal (BKPM), the Indonesian government’s Investment Coordinating Board – covers a range of programs that aim to provide all Indonesians an opportunity to move into the digital economy, including opening a Grab R&D center in Jakarta to develop technology innovations for the Indonesian market, launching a social impact fund to invest in companies focused on deepening financial inclusion, and increasing access to mobile payments and financing opportunities across the country.
Grab says Indonesia is its largest market in Southeast Asia, and that its GrabCar and GrabBike businesses in the country grew more than 600% in 2016. Grab services are currently available in Jakarta, Bali, Bandung, Padang, Makassar, Medan, Surabaya and Yogyakarta – which, Grab adds, is a wider service footprint than other ride-hailing businesses in Indonesia.
Grab also says it continues to see highly active user engagement and stickiness across its multi-service platform, with one in three of Grab’s Indonesian passengers using more than one Grab service. Meanwhile, Grab drivers earn 40-70% more per hour than the average transport or delivery driver in Indonesia. Grab says it has generated over $260 million in income for its Indonesian driver partners.
Grab’s master plan for Indonesia covers three major pillars:
Create new information technology jobs and upskill Indonesia’s human capital: Grab will open an R&D center in Jakarta and target hiring 150 engineers over the next two years. The R&D center will focus on developing innovations specific to Indonesia by building on the success of Grab’s existing localized solutions, including algorithms to address new road regulations in Jakarta and GrabHitch (Nebeng), a “bike-pooling” service that caters to nearly 1.4 million commuters in greater Jakarta.
To equip Indonesian engineers with globally competitive skills, Grab will provide training opportunities at its R&D centers in Singapore, Beijing and Seattle. Fresh graduates with curious minds and a passion to improve lives in Indonesia are welcome to apply, and Grab will select potential engineers through on-campus interviews and partnerships with leading state and engineering universities.
Invest in “technopreneurship” for social good: Grab will start the ‘Grab 4 Indonesia’ social impact investment fund to finance companies focused on deepening financial inclusion across all cities and income levels in Indonesia. Grab will invest up to $100 million in startups or aspiring technopreneurs to grow the next wave of Indonesian companies with social aspirations to bring more Indonesians into the digital economy. The fund will focus on the mobile and financial services industries, with a particular emphasis on serving smaller cities and communities who have yet to benefit from the digital economy.
The investment fund will help selected startups accelerate their products to market with both capital investment and technical assistance from Grab. In support of the “1,000 Digital Startups National Movement” initiated by the government, Grab will also organize a series of entrepreneurship programs in collaboration with selected partners including educational institutions and entrepreneurship organizations. This will include seminars for aspiring technopreneurs and mentorship from Grab executives on developing sustainable business plans with social purpose.
Expand access to mobile payments and financing opportunities: Grab will continue to launch and enhance mobile services to increase Indonesians’ access to mobile payments and financing opportunities. Grab will expand its mobile payment solutions in Indonesia through GrabPay Credits, its cashless stored value option, and existing partnerships with Mandiri and their e-Cash solution, while also continuing to develop a shared e-money payments platform with Lippo Group and Nobu Bank to enable all Indonesians to use Grab to pay for services and goods at Lippo’s retail partners.
In addition, Grab will provide its driver partners with access to more financing opportunities to purchase their own smartphones and automotive vehicles, giving them the opportunity to build sustainable livelihoods and become micro-entrepreneurs. Grab will continue to work with its banking partners, including Nobu Bank, to extend financing opportunities to all Indonesian consumers.
Grab also plans to continue to expand to more cities in Indonesia, grow its transport services, and invest in GrabPay as a mobile payments platform.