Grab Holdings Inc., the $14 billion global ride-hailing company based in Singapore, is negotiating with potential investors as it seeks to raise as much as $500 million to boost its financial services division.
Reuters reports Hong Kong-based AIA Group Limited, the publicly-traded life insurance group, Prudential PLC, the British global life insurance and financial services company and others are expected to reach agreements as early as October, according to sources.
Grab has added food delivery and insurance to its services since the start of the pandemic.
The insurance companies are likely to provide half of the investment over several fundraising rounds, one of the sources told the news service.
Grab, Prudential and AIA declined to comment.
Grab and its Jakarta, Indonesia-based rival Gojek have suffered during the pandemic as business fell as a result of lockdowns. But its food delivery services took off.
If a deal between Grab, AIA and Prudential is signed, it would fuel Grab’s financial services products.
“Finalizing new funding during these times could also help Grab in its sales pitch for the Singapore banking license,” a source told Reuters.
Called “Thrive with Grab,” the strategy is designed to tap into the region’s vast market where more than 70 percent of Southeast Asians are underbanked.
In June, Grab’s online grocery shopping delivery service expanded to a sizable share of the Southeast Asian market as it added Cambodia to its list of countries serviced by its GrabMart shopping and delivery app, now available in eight Southeast Asian countries and 50 cities.
But later that month, Grab announced that more than 300 workers or about 5 percent of its workforce would be laid off as the impact of COVID-19 continued to take its toll.
The pain has been shared by Uber in India, which also said it planned to lay off 600 workers in June amid a severe drop-off in the demand for its services. The move, part of a survival strategy amid the pandemic, will reduce Uber’s global workforce by 23 percent.
Earlier this year, Lyft laid off 17 percent of its workforce. The company said it will lay off 982 employees and furlough an additional 288 to trim operating costs due to the COVID-19 pandemic.
Also, San Francisco-based Uber announced 3,700 layoffs and its CEO isn’t taking a base salary this year.