Sensing Weakness, Uber’s Asian Rivals Make $2.5 Billion Play

Sensing Weakness, Uber’s Asian Rivals Make $2.5 Billion Play

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The ride-hailing company Grab is competing with Uber for dominance in Southeast Asia.

Credit
Edgar Su/Reuters

HONG KONG — In East Asia, Uber’s biggest rivals smell blood.

Grab, the Singapore-based ride-sharing company competing with Uber for dominance in Southeast Asia, said on Monday that it expected to raise $2.5 billion in a new fund-raising round, in part with the help of the onetime major Uber competitor Didi Chuxing, which outmaneuvered its American rival in China.

The round will include a combined $2 billion from Didi and the Japanese tech investment giant SoftBank that would value Grab at more than $6 billion, according to a person familiar with the deal who was not authorized to speak on the record.

In laying down such a big pile of cash, Didi and SoftBank are betting that they can repeat what they pulled off in China, where Uber ultimately sold its operations to Didi in exchange for a 17 percent equity stake. More recently, Uber made a similar move in Russia, forming a partnership with Yandex.Taxi to cut down on competition there.

With a big, young, tech-savvy population, Southeast Asia has been an enticing market for tech companies, though large cultural and language differences across the region complicate matters. Analysts generally point to Grab as the market leader, but Uber remains competitive in several markets. In some places, local rivals have also mounted challenges.

Now well-stocked with cash and focused exclusively on the region, Grab is aiming to push out Uber. In part, it is likely hoping to capitalize on recent turmoil: Last month, a shareholder revolt at Uber led to Travis Kalanick’s stepping down as chief executive, as Uber was exposed as having a workplace culture that included sexual harassment and discrimination, and policies that pushed the envelope in dealing with law enforcement and even partners.

The investment also raises questions about Uber’s partnership with Didi. While the two are now partners in China, the investment announced Monday makes it clear that elsewhere, Didi still views Uber as a competitor. In the statement, Didi’s founder and chief executive, Cheng Wei, pointedly showed which side he was on, saying Grab had established “clear leadership in Southeast Asia’s internet economy.”

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