SINGAPORE (Reuters) – Singapore-based ride-hailing company Grab has mandated a few banks to approach potential investors to take minority stakes in its financial services business as it looks to spin off the unit, according to two people familiar with the matter.
Grab has adopted an aggressive strategy to expand its range of services, from transport to food delivery and payments, as it races Indonesia’s Go-Jek to become an app-for-everything in Southeast Asia, home to about 650 million people.
One of the sources said banks and insurance companies are among the potential investors in Grab’s financial services business, adding that the plan is in an early stage.
The source, who declined to be identified as he was not authorised to speak to the media, said Grab was looking to raise less than $500 million through its spin-off.
“This is more about getting in strategic investors than just raising funds,” said the source. “Grab is still keen to keep control of the unit.”
Grab is considering spinning off its payments and financial services businesses, the Financial Times said on Wednesday.
A Grab spokeswoman declined to comment on the potential spin-off but said the company always evaluated the capital structure of its businesses.
The latest move comes just months after the firm, Southeast Asia’s most-funded start-up, announced it had raked in more than $4.5 billion in a year-long funding exercise in the region’s largest private financing round.
Grab, backed by SoftBank, said last month it was seeking to raise another $2 billion this year.
Grab is pushing deeper into consumer credit and is expanding lending to small businesses as part of its big expansion into the financial services sector, an area it has earmarked for growth.
Both Grab and Go-Jek started out as ride service players and have rapidly amassed millions of users with cut-rate prices in low-income countries.
(Reporting by Anshuman Daga in SINGAPORE and Kane Wu in HONG KONG; Additional reporting by Akshay Balan in BENGALURU and Aradhana Aravindan in SINGAPORE; Editing by Clarence Fernandez)
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