The automobile industry continues to transform and is coming to grips with the transformation by ride-sharing, that is disrupting the industry’s traditional model of vehicle ownership.
This week, Toyota Motors announced (link) a large bet in ride hailing service Grab. Toyota’s investment in Grab is double the size of General Motors’s investment in Lyft in 2016. According to the announcement, it is:
- Largest-ever investment globally by an automotive manufacturer in the ride-hailing sector
- The investment will accelerate Grab’s next phase of growth to build Southeast Asia’s leading online-to-offline (O2O) mobile platform
- Toyota is a lead investor in Grab’s ongoing financing round, launched following Grab’s merger with Uber in Southeast Asia
Ming Maa, President of Grab, said:
“As a global leader in the automotive industry, Toyota’s investment in Grab is based on their conviction in our leadership in driving the adoption of new mobility solutions and expanding O2O mobile services, such as GrabFood and GrabPay, in the region. Grab is the first Southeast Asian technology startup to have achieved run rate revenues of over US$1 billion across an installed mobile base of over 100 million users. Our rapid user and revenue growth is a testament to our ability to hyper-localise, efficiently execute and provide the highest efficiency platform in a region as diverse as Southeast Asia. We are honored to be supported by industry leaders including Toyota, Uber, Didi and SoftBank.”
According to Bloomberg, “Toyota, the world’s most valuable carmaker with a market capitalization of about $221 billion, has sought partnerships with a pantheon of tech companies including Amazon Inc. and Apple Inc. in a bet that data will be a key part of its future. Toyota has also partnered with ride-hailing companies beyond Grab, taking an undisclosed stake in Uber in 2016 and announcing a collaboration with China’s Didi Chuxing in January. It has also backed Japan Taxi, an Uber rival run by the chairman of Tokyo’s biggest taxi operator. Toyota had about $54 billion in cash, equivalents and short-term investments as of March 31 — giving it firepower for deal-making.”