Grab is in the process of raising $2.5 billion for it ride hailing service in Southeast Asia, but that hasn't stopped the Uber rival from tapping banks for $700 million in debt facilities to develop its business.
The Singapore-based company said it had pulled in the financing from "leading global and regional banks" to expand its car rental fleet in Singapore and Indonesia, two of its key markets. This debt facility takes Grab to over $4 billion in funding. It raised $2 billion from SoftBank and China's Didi in July, with $500 million set to be added by other backers soon.
This new capital will be put to work purchasing vehicles which can then be provided to drivers on a leased basis. The overall aim is to use this flexible financing option to add drivers who can't afford to buy cars to its platform. The company claims 1.8 million drivers across its seven countries in Southeast Asia. That number, it added, is three times higher than it was in January.
Singapore and Indonesia have been targeted for different reasons. Singapore, a strategic market, is one of the most expensive markets in the world for buying a car hence Grab believes leasing could enable for would-be drivers to work for its service.
Indonesia, the world's fourth largest population with 260 million people, is seen as a huge opportunity for ride-sharing companies but the economic issues are different. There many who might benefit from driving for Grab, Uber or local rival Go-Jek lack consumer credit options to buy a car. That leaves leasing as their best immediate move.
"With these debt facilities, Grab will make more cars available for rental, provide more favourable rental terms and services for driver partners, and increase the supply of vehicles on the road, making rides faster and more affordable for passengers," the company said in a statement
Grab claims to have around 63 million mobile downloads. Uber doesn't release data for the region but anecdotal evidence suggests that, across the region, Grab has its overtaken its U.S. rival. A TNS survey commissioned by Grab came to the same conclusion, with the Asian firm said to control over 70 percent of the private hire market where both companies compete.
Meanwhile, in Singapore, Grab is making moves to shore up the licensed taxi space, too, after it teamed up with public transportation firm SMRT. The partnership enables Grab to work with SMRT's licensed taxi and private car fleets, while introducing hybrid and fully electric
vehicles in the future.
This article originally appeared on TechCrunch.