FUNDING
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Future of transport

Uber-rival GrabTaxi raises US$400m from investors including China sovereign wealth fund

PUBLISHED : Monday, 17 August, 2015, 10:01am
UPDATED : Monday, 17 August, 2015, 10:16am

Uber's China woes aren't limited to the country's borders: one of its main rivals in southeast Asia has announced it raised US$400 million from investors in a funding round led by China's sovereign wealth fund.

China Investment Corporation, the US$740 billion fund, was the lead investor in Singapore-based GrabTaxi's latest round, valuing the southeast Asian taxi-hailing app at around US$1.8 billion.

GrabTaxi operates in 22 cities across six southeast Asian countries, and reportedly plans to use its fresh funds to further expand in the region.

The Singaporean app is not CIC's first foray into the taxi-hailing market. Last month, the fund took part in Chinese market leader Didi Kuaidi's record-breaking US$2 billion investment round, which valued the firm at US$15 billion.

While the Chinese app still controls some 90 per cent of the domestic taxi-hailing market, it has faced increased competition from US firm Uber, which recently set aside US$1 billion for further expansion in China.

Uber chief executive Travis Kalanick said in June that China was the "#1 priority for [our] global team".

That expansion has not come without problems however. In May the company's offices in Guangzhou and Chengdu were raided by the authorities, and it has been subject to protests from taxi drivers who accuse the app of stealing business from them.

This month, that unrest spilled over into Hong Kong. Police raided Uber's offices in the city and detained two staffers. They also arrested several Uber drivers for allegedly operating without a hire-car permit and driving without proper insurance.

The move came after several protests staged by taxi drivers in Hong Kong in recent months against Uber and similar apps.

Uber struck back last week with a concerted public relations campaign, attracting nearly 50,000 signatures to a petition supporting its activities in the city.

On Sunday, Hong Kong Consumer Council president Wong Yuk-shan said the watchdog will examine the taxi app market, warning that there was an insurance issue involved in using car-hailing services. Uber has always maintained that its drivers have sufficient insurance.