Ride-hailing behemoth Grab raises even more money

February 25, 2020, 3:04 PM UTC

My God, Grab has a lot of money.

The Singapore-based ride-hailing startup raised more than $856 million from strategic Japanese investors including Mitsubishi UFJ Financial Group (MUFG) and TIS. 

The money will come as two separate capital infusions. First, MUFG, which is the largest bank in Japan, will invest $706 million into Grab to co-develop financial products. MUFG will also get “First Choice Bank” status, which means that Grab can use its financial services when it needs a banking partnership in countries where MUFG operates.

TIS, a provider of network solutions and system integration services, will invest the remaining $150 million. Grab and TIS plan to collaborate on “enhancing the digital payment infrastructure in Southeast Asia and in Japan to enable greater adoption of cashless payment options.” In other words, they’ll focus on improving GrabPay, which is the company’s mobile wallet that allows users to pay for Grab services. 

“Digital payments are taking off in Southeast Asia, as it caters to a largely mobile yet underbanked population,” said Grab president Ming Maa in a news release. “We need to create better experiences to pay for daily transactions.”

In 2019, Grab announced a whopping $6.5 billion in Series H funding at a valuation that hovered around $14 billion, making it Southeast Asia’s most valuable unicorn. Grab did not disclose its most recent valuation after the latest funding.

There have been rumors that Grab was in talks to merge with its rival Go-Jek, the Southeast Asian on-demand transport startup. (Go-Jek has denied reports of a potential merger.)

To better understand Grab’s strategy and find out why it continues to raise so much money, I encourage you to read my colleague Clay Chandler’s excellent feature on its “super-app model.” He writes: 

“How to create a super-app for millions of consumers who have never even seen a credit card? Go-Jek and Grab have used the Internet and smartphones ingeniously to create armies of mobile tellers. Car and motorbike drivers collect cash and credit it to customers’ digital wallets. They toil alongside neighborhood agents who, in addition to topping up the wallets, help consumers who lack bank accounts purchase goods online, pay bills, buy insurance, or apply for loans.”

MO’ MONEY: Fintech startup Revolut has raised $500 million in venture funding at a $5.5 billion valuation, which is three times the valuation of its last fundraising round in 2018. TCV led the round, and previous investors included DST Global, Index Ventures, and Balderton Capital.

Revolut is building a financial service to replace traditional bank accounts, and it will use the fresh infusion of cash to improve product features and plans to expand to the United States in the coming months.

Fintech companies have been on a tear lately. Earlier this month, Starling Bank raised £60 million ($77.8 million) in funding, and Monzo and Monese are reportedly both in talks to raise up to £100 million ($129 million). 

Howard Lindzon, an early-stage investor who backs fintech companies, wrote a blog post yesterday titled, “Is This a Fintech Bubble?” He writes, “I think we are in a fintech bubble. I am not sure if we topped for now or a big acceleration is at hand.” He explains that there is a multiplier of “fresh” fintech money being unleashed on a world that will push valuations even higher.

Meanwhile, Intuit just confirmed that it will pay a whopping $7.1 billion in cash and stock to acquire Credit Karma, a San Francisco-based fintech provider of consumer credit score checks. 

Keep your eye on the fintech sector because I have a feeling dealmaking will not be slowing down in the near future.

Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com 


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