Inside Grab: Where Southeast Asia’s Most Ambitious Fintech Goes Next

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Euromoney, August 4 2020

Grab Financial launched a suite of new products on Tuesday, continuing a swift expansion that has yet to be accompanied by profitability.

On Tuesday, Grab Financial Group, the fintech attached to the southeast Asian ride-hailing and food delivery leader, announced a set of new products and services from investment to insurance to third-party lending.

None of them, individually, is truly a game-changer. In aggregate, though, they offer a snapshot of a fast-expanding regional enterprise that isn’t going to wait to find out if it’s got a Singapore digital bank licence before setting an ambitious course.

We have come a long way since Grab launched its GrabPay Wallet in 2017 to tie in with its ride-hailing service. Already it feels like it has been around for ever in Singapore, steadily entwining itself with the everyday lives of consumers as all the best fintechs do. First through reward points, then insurance joint ventures (ZhongAn) and credit cards (Citi, then a numberless card with Mastercard), the company has sought out niches and filled them where licences permit, mainly in Singapore, Malaysia and Indonesia, but increasingly across all of southeast Asia, framing the whole thing with its vision of accessibility and inclusion.

And so to Tuesday. Grab calls its latest strategy ‘Thrive with Grab’, an extension of its previous ‘Grow with Grab’, and its centerpiece is a product called AutoInvest, a micro-investment that takes the small sums of money that sit around on Grab platforms in between cab rides and food delivery, and invests them in an account offering a modest yield.

The underlying investment is done through fixed income funds run by Temasek-owned Fullerton Fund Management and Singapore’s UOB; they forecast a return of 1.8% annually, which is appealing in comparison to the 0.05% you get in a regular bank account in Singapore these days.

AutoInvest looks and sounds a lot like Yu’e Bao, the Ant Financial (now Ant Group) product that translates as ‘leftover treasure’. This used the same model of sweeping up cash dormant within its ecosystem, with no minimum amounts, and putting it into an investment product.

When Ant did this, it swiftly became the largest money market fund in the world, almost by accident, even if it has shrunk considerably over the last year and given that title back to JPMorgan.  The principle here is the same: make it more and more attractive for money to reside within Grab’s wallet, products and broader ecosystem, because not even a dollar within it will be neglected.

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Chris Wright
Chris Wright
Chris is a journalist specialising in business and financial journalism across Asia, Australia and the Middle East. He is Asia editor for Euromoney magazine and has written for publications including the Financial Times, Institutional Investor, Forbes, Asiamoney, the Australian Financial Review, Discovery Channel Magazine, Qantas: The Australian Way and BRW. He is the author of No More Worlds to Conquer, published by HarperCollins.

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