It was on a late July flight home to Singapore when Mr Anthony Tan grasped the enormity of news that his biggest ally, Didi Chuxing, was about to buy out arch-rival Uber’s Chinese business.
The stunned Grab co-founder knew better than to celebrate the vanquishing of an enemy. Unfettered by a costly battle for China, the world’s most valuable start-up would now pivot to his South-east Asian backyard. And with Didi and Uber Technologies taking stakes in each other, it spelt trouble for a global alliance forged to keep the US ride-hailing giant in check.
Distraught, he took to his laptop and spent the next hour hammering out a rallying cry (and warning) to his 1,500 employees. Sure enough, soon after the deal, his American rival began re-deploying resources and engineers to markets from India to Latin America, while rolling out new features and services from Singapore to Hanoi.
“There are times you just go: It’s time to rise up,” said Mr Tan, a 34-year-old who’s fond of quoting the Bible and likens Grab to David facing an Uber-Goliath. For Mr Tan, the climax of that Old Testament story wasn’t the battle itself but when “the little guy” walked down the battlefield towards his giant adversary. “That takes real courage”, the Malaysian-born chief executive officer added in his first major interview in a year.”The battle is already won if you can get to the battlefield.”
The mission statement penned at 30,000 feet was a rare display of emotion for a man whose ultra-competitiveness lurks just beneath an unflappable demeanour, according to friends. He responded to Uber’s deal by clinching US$750 million (S$1 billion) from investors led by SoftBank Group — a record for a South-east Asian tech start-up. That money will bankroll Mr Tan’s newest endeavour: GrabPay, a mobile payments service that could set it apart in a region where about 90 per cent of transactions take place with cash.
“Anthony hates losing,” said CEO of Vertext Ventures Chua Kee Lock, the venture arm of Singaporean state-owned investment company Temasek Holdings and Grab’s first institutional investor.
It’s unclear how the alliance between Grab, Didi, Lyft and India’s Ola will proceed. Ms Jean Liu, Didi’s president, told a summit in San Francisco the company is a “big believer” in leveraging the knowledge and strengths of local players. Her company is said to have been in talks to join Grab’s last round of funding, though that investment never got nailed down even as other backers were announced. No one’s suggesting the quartet is breaking up and Mr Tan said the four founders remain close and still share information, but had no immediate plans to hook up their networks.
“We’re not launching any time soon,” Mr Tan said of global roaming. “Frankly, for us, we are just focused on our local stuff.”
Grab will take on Uber solo if needed. It’s already dispatched a clutch of rivals en route to expanding across 31 cities in six countries since its 2012 inception in a Kuala Lumpur warehouse. Uber is active in just 16 South-east Asian cities. According to App Annie, Grab topped app downloads in Indonesia, the Philippines, Thailand and Vietnam in the third quarter. Uber led in Singapore and Malaysia, Grab’s home turf.
“We’ve charted our journey to be alone,” Tan said. “Didi did whatever it takes to win. In our case, we will do whatever it takes to win.”
Problem is, he’s now facing a US$69 billion behemoth that’s raised over US$16 billion to date. Grab, in contrast, is said to be worth little more than US$3 billion after raising a cumulative US$1.45 billion. “Uber is growing strongly and sustainably across Southeast-Asia, which is a major focus for the company,” Uber said in an e-mail to Bloomberg.
Mr Tan, whose great-grandfather was a taxi driver, got the inspiration to start Grab during his days at Harvard Business School. He quit the family business in Malaysia, Tan Chong Motor Holdings in 2012 and started a taxi-hailing service then known as MyTeksi with his Harvard classmate Ms Tan Hooi Ling.
On a recent afternoon at Grab’s Singapore offices, Mr Tan talked about his vision and the hectic pace he sustains. Constant travel has taken a toll: Perched on a silver gym ball to ease the pressure on his back, his fingers were covered with blisters from hand-foot-and-mouth disease, a viral infection.
Yet he grows energised when talking about Grab’s future. Mr Tan’s priority now is building GrabPay into a regional mobile wallet and payments service to hook users and drivers without credit cards. “We really believe that GrabPay will change the game.”
This year, it teamed up with Ant Financial to allow Chinese travellers visiting Singapore and Thailand to pay for rides through Alipay. Customers can now hook up their Citibank credit cards to GrabPay to pay for rides with points. In Indonesia, it partnered with PT Bank Mandiri to offer a mobile wallet service, and it struck an agreement with Lippo Group to let shoppers use its app to pay at the conglomerate’s department stores, cinemas and coffee shops. All that’s intended to further Grab’s ambition of becoming a consumer Internet company that just happens to offer rides. ”We are creating the BAT of South-east Asia,” Mr Tan said, referring to China’s triumvirate of Baidu Holdings, Alibaba Group, and Tencent Holdings. “The next generation of great Internet companies in Southeast-Asia will come from Grab if we get it right.”
Mr Tan isn’t the only one gambling against Uber: His backers include state investment firms Temasek and China Investment Corporation, as well as Tiger Global Management. The grandson of Mr Tan Yuet Foh, who co-founded an auto sales-and-assembly empire, is driven by a desire to forge his own legacy. Mr Jixun Foo, managing partner at backer GGV Capital, recalled how Mr Tan once took responsibility for a poor hiring decision he had little to do with.
“You could always blame someone, but he took it on himself,” said Mr Foo, who sits on the board. “And he has a very strong desire to prove himself.”
For now, Grab is fighting it out in a South-east Asian ride-hailing market with some 620 million people, forecast to grow more than five times to US$13 billion by 2025. But it’s been a topsy-turvy journey, replete with stunners like Uber’s capitulation.
“It’s like Korean drama,” Mr Tan joked, invoking a genre known for its twists and turns and themes of revenge, betrayal and power. Alibaba co-founder Jack Ma put it best during a recent conversation, he said.
“He said, ‘You know Anthony, life is a tsunami. When you’re up on a tsunami, get ready for the crash. When you are at the bottom, get ready for the next wave’.”
Source: TODAY Online