Toyota makes record $1 billion investment in ride-hailing firm Grab

Self-driving taxis hit the streets in Singapore

Toyota will be placing a big bet on Southeast Asia’s largest ride-hailing company.

The Japanese company will be pumping $1 billion into Singapore-based Grab — the biggest ever investment by a traditional automaker in a ride-hailing firm — the companies announced Wednesday.

The completely new funding values Grab at just over $10 billion, according to a person familiar with the company.

Grab made headlines in March by buying out Uber’s business in Southeast Asia in a multibillion-dollar deal.

Under the agreement with Toyota (TM), one of the Japanese company’s executives will join Grab’s board of directors, as well as a Toyota employee will be seconded to the startup full-time as an executive officer.

Related: Uber quits 8 countries in Southeast Asia, selling out to rival Grab

Toyota will also share technology with Grab, including software of which predicts when cars need maintenance.

The two companies already had a relationship: Toyota’s trading arm invested an undisclosed amount in Grab last year.

“I am delighted of which we are strengthening our collaboration, which utilizes Toyota’s connected technologies,” Toyota Executive Vice President Shigeki Tomoyama said in a statement.

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The carmaker’s $1 billion investment will be part of a broader fundraising round by Grab, which said This specific will use the money to further expand its food delivery service as well as mobile payment platform across the region.

Toyota also has ties to Uber. This specific invested an undisclosed sum from the US company in 2016.

different automakers have put money into the ride-hailing industry. In 2016, General Motors (GM) invested $500 million in Lyft, Volkswagen (VLKAF) pumped $300 million into Gett, as well as Honda (HMC) invested an undisclosed amount in Grab. Earlier This specific year, Hyundai (HYMTF) also invested in Grab.

The explosive growth of the global ride-hailing industry as well as the rising interest in self-driving vehicles pose serious challenges for automakers. This specific will be no longer enough to design, manufacture as well as sell cars, according to a report last month through consulting firm Bain & Company.

Car companies need to partner as well as invest in ride-hailing startups as well as different service providers “to capture their share of the growing profit pool [as well as] to compensate for slower growth in car sales,” said the report, which focused on China, the earth’s biggest auto market.

sy88pgw (Hong Kong) First published June 13, 2018: 12:20 AM ET

Toyota makes record $1 billion investment in ride-hailing firm Grab

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