The new funding values Grab at just over $10 billion, according to a person familiar with the company.
Toyota announced today that it has concluded an agreement with ride-sharing app company Grab to strengthen their existing partnership and expand collaboration in Southeast Asia to drive further advances in Mobility as a Service (MaaS).
Toyota Motor Corp has agreed to invest USD1 billion in Southeast Asian ride-hailing firm Grab as a lead investor in the company's ongoing financing round, which was launched after it bought the regional business of Uber Technologies Inc.
Data collected from the recorders could also help Toyota in its own development of next-generation mobility services, including a self-driving electric vehicle it plans to develop for companies to use for tasks such as ride-hailing, package delivery and mobile shops.
A Toyota executive will be appointed to Grab's board, and another Toyota employee will be seconded to Grab to as an executive officer.
"Going forward, together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia", Shigeki Tomoyama, Toyota executive vice-president, said in the release.
The deal comes as the auto industry faces a spike in the need for technological prowess with the advent of features such as autonomous driving, while app makers offer passengers the option to forgo vehicle purchases by connecting them with drivers. Six-year-old Grab faces fierce competition from Indonesian rival Go-Jek, which is expanding ride-hailing and other services in Southeast Asia.
Grab added that the investment will allow Grab to further expand its range of online-to-offline services, such as GrabFood and GrabPay, deeper into the region.
Grab and Toyota will roll out connected vehicle services, such as telematics-based insurance, which could reduce the cost of insurance premiums for safer Grab drivers, said Grab.
Southeast Asia, home to about 640 million people, is a major arena for tech firms offering services from digital payments and ride-hailing to e-commerce. Toyota is an incredible company that has done so much for the world. In 2016, General Motors invested US$500 million in Lyft, and Volkswagen also poured US$300 million into Israeli taxi app Gett in the same year.
Grab will also work with Toyota on connected auto services such as user-based insurance, financing programmes and predictive maintenance features for Grab's drivers.
Ma estimated that Grab will reach over US$1 billion in revenue this year, as its users exceed 100 million in the region.
Grab, which is similar to Uber in the US, is in eight nations in the region, including Malaysia, Singapore, Thailand and Indonesia.