Singapore ride-hailing company Grab is reportedly considering a spinoff of its financial services assets, according to a Reuters report on Wednesday (May 8).
The publication said Grab is in communication with several financial institutions, asking them to approach investors to obtain minority stakes in its financial services operations as part of broader plans to spin off the assets under Grab Financial. Citing two unnamed sources, the news outlet said Grab remains in the early stages of any spinoff plans, but would seek to raise less than $500 million through a deal.
One source said insurance companies and banks are among the potential investors.
Grab turned to financial services in an effort to expand its product offering and secure dominance in the market. The ride-hailing company also provides payment and food delivery services, the news outlet noted, citing separate reports in the Financial Times that said Grab would look to divest its financial services and payments operations. The company also moved to introduce small business lending and consumer credit services to fuel growth.
“This is more about getting in strategic investors than just raiding funds,” one source said. “Grab is still keen to keep control of the unit.”
A spokesperson for the company declined to comment on the matter.
Grab announced a $4.5 billion private financing round several months ago, marking the largest in the region, reports said. The company revealed plans to raise an additional $2 billion sometime this year as it continues to focus on expansion efforts in the region, particularly Indonesia.
Last month Theo Vassilakis, the company’s chief technology officer, announced he would be stepping away from the position, citing personal reasons.
“Looking back, I’m amazed by how much we achieved by focusing on out-serving our customers, all in a relatively short time,” he said in a statement, citing the company’s divestiture from Uber and scaling up its FinTech operations.