TOKYO/SINGAPORE (Reuters) – Toyota Motor Corp’s trading arm became the latest participant in ride-hailing firm Grab’s current financing round that is expected to raise $2.5 billion, led by Chinese peer Didi Chuxing and Japan’s SoftBank Group.
Toyota Tsusho Corp, in which Toyota Motor is the biggest stakeholder, has invested an undisclosed sum in Grab, the companies said in separate statements on Wednesday.
The investment is the latest in a Southeast Asian startup as major companies seek growth in the region’s huge developing economies with young, tech-savvy demographics.
Toyota Motor said it would install its driving recorder devices in vehicles operated by Grab, as the automaker expands further into new driving services.
Under a pilot program, Toyota will have its TransLog device installed in 100 rental cars operated by Singapore-based Grab, enabling the companies to analyse driving patterns as well as offer improved access to connected car services.
Didi and SoftBank are already investors in Grab and other ride-hailing services globally. In July, Grab said the pair would add $2 billion and that $500 million would come from others, making the fundraising Southeast Asia’s biggest-ever single round of financing.
A person close to Grab has said the $2.5 billion fund raising would value the company at $6 billion.
Grab operates private car, motorcycle, taxi and carpooling services across seven countries with 1.2 million drivers.
It said it has a market share of 95% in third-party taxi-hailing and 72% in private-vehicle hailing in Southeast Asia.
But its share could be under threat as San Francisco-based Uber, the world’s largest ride-hailing service, is expected to increase its focus on the region after it folded its China business into Didi last year.
The ride-hailing sector is currently dominated by technology firms, but automakers such as Toyota, Volkswagen, and General Motors have been investing in tie-ups with these service providers to hedge against the shift in the vehicle market away from private ownership.
Toyota has already tied up with Uber, providing flexible vehicle leasing terms for Uber drivers, while the two also plan to share research and development efforts. This agreement also includes an undisclosed investment in Uber.
(Reporting by Naomi Tajitsu in Tokyo and Anshuman Daga in Singapore; Editing by Himani Sarkar)