Uber to sell its southeast Asia business to grab, a regional rival

pulse

March 26, 2018 4:48 AM

Uber, which for years spread across the globe with command-and-conquer rapaciousness, is pulling back from another major ride-hailing market.

The company said Sunday that it would sell its Southeast Asia ride and food-delivery businesses to Grab, a rival based in Singapore, in the latest move to shore up its finances and refocus its business ahead of a planned public listing.

Uber will get a 27.5 percent stake in Grab in exchange. Uber’s chief executive, Dara Khosrowshahi, will join Grab’s board. Further financial terms were not disclosed.

The détente in Southeast Asia, which is similar to deals Uber has made in China and Russia in recent years, comes at a time of larger changes at the company, based in San Francisco.

SoftBank, the Japanese conglomerate that recently took a big stake in Uber, has also backed a host of its competitors, including Grab in Southeast Asia, Ola in India and Didi Chuxing, which bought Uber’s China business in 2016. That means SoftBank would rather these companies did not spend too much money competing against one another.

Uber’s exit from Southeast Asia, a region of more than 600 million people, also reflects the new direction the company is taking under Khosrowshahi, who replaced Travis Kalanick as chief executive last year.

For Uber, ceding Southeast Asia still leaves it with plenty of challengers elsewhere in the world. Didi Chuxing, based in Beijing, invested alongside SoftBank in Grab last year. It recently raised money from SoftBank and other investors at a valuation of $56 billion — higher than the $48 billion at which Uber was valued as part of last year’s stake sale to SoftBank.

Now, Didi wants to go global. The company recently took control of 99, an Uber rival in Brazil, and is recruiting on LinkedIn ahead of a planned opening in Mexico.

Didi is also aiming to expand soon into Japan — a market in which Uber, too, will make a big push this year, according to Khosrowshahi. SoftBank, despite being an investor in both Uber and Didi, announced recently that it would partner with Didi in Japan.

This article originally appeared in The New York Times.

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