Southeast Asian ride-sharing platform Grab reportedly is close to finalising a deal to acquire Indonesian online payment startup Kudo for more than $100 million.
A source familiar with the deal told Reuters the acquisition would be funded from the $700 million Grab committed to investing in Indonesia over the next four years. Indonesia, with a population of 250 million, is Grab’s largest market.
Kudo, which was set up in 2014, targets customers without bank accounts and allows them make online purchases through agents, Reuters said.
Two weeks ago Singapore-based Grab announced the ‘Indonesia 2020′ investment initiative, which it said supports the government’s goal of becoming the largest digital economy in the region by 2020. The effort will include building an R&D centre in Jakarta, which will have more than 150 engineers in two years. It also said it will establish a fund to invest up to $100 million in startups in the mobile and financial services sectors.
The company in July expand its payment system, GrabPay, into a full cashless digital wallet service allowing users to pay for items outside of its transport service.
Both Grab and rival Uber have faced a number of regulatory obstacles in Indonesia. The government last year warned operators of taxi-hailing services it would more tightly enforce new regulations. Under Indonesian traffic law it is illegal for an individual to provide public transport services – drivers must obtain special public transport licences and operate as part of a cooperative or company.
In December Uber teamed with Indonesia’s second largest taxi operator, Express, to launch a pilot car-booking programme.
Grab, which said its GrabCar and GrabBike businesses each grew more than 600 per cent last year, plans to provide its driver partners with access to more financing opportunities to purchase their own smartphones and vehicles, and continue to expand to more cities in Indonesia.
In September Grab raised $750 million from investors, including Japan’s SoftBank, to expand its services in Southeast Asia at a time when Uber has been pulling back in the region. The fundraising round was just a month after Indonesian rival Go-Jek raised $550 million.
To date Uber clocked up more than 630,000 drivers and 33 million downloads across Southeast Asia, and claims a 95 per cent market share in taxi-hailing services in the region.