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Why Uber Might Sell Asian Business to Grab

Grab’s $2 billion fundraising, announced on Monday and led by SoftBank, has changed the ride-hailing game in that region, giving the Singapore-based firm what may be an unassailable advantage. Uber may have to consider selling its assets to Grab.

That is an enormous turnaround on the situation for much of last year. Grab, the ride-hailing leader in Southeast Asia, seemed to be a mess. It was struggling to catch up to Uber’s technology and launch features such as ride-pooling. Grab was losing more money than it was generating in revenue, as it kept prices down to retain its slim edge over Uber in market share. Some well-respected engineers and managers had left. And after Uber in August sold its China business to Didi Chuxing, Uber set its sights on winning on Grab’s turf. 

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Grab is effectively controlled by CEO Anthony Tan, whose mother is chairperson of the company’s board, which also counts one of Mr. Tan’s brothers and one of his best friends as directors. SoftBank, which also has a board seat, has exercised some control by installing trusted veterans to run parts of Grab. Ming Maa, Grab’s president, joined from SoftBank’s investment arm in September. Russell Cohen, Grab’s brand new operations leader, joined from SoftBank’s commerce business based in Japan.

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The latest fundraising, which followed a $750 million round last fall that also was led by SoftBank, is an incredibly enormous sum—roughly 20 times what Grab generated in net revenue last year.