Grab’s fintech arm Grab Financial Group (GFG) announced today (Jan 14) that it has raised over US$300 million in its Series A funding round, bringing its valuation to US$3 billion.
The round is led by South Korean firm Hanhwa Asset Management Co. Ltd. Other investors include K3 Ventures, GGV Capital, Arbor Ventures and Flourish Ventures.
It is reported that the round, which struggled to close for more than a year, was targeted to close at US$500 million.
GFG, which offers payments and financial services across lending, insurance and retail wealth management in the region, said it will use the new funds to continue helping more individuals and SMEs access the benefits of financial services.
It will do so by further investing in talent, and expanding its offerings in SEA with more affordable, convenient and transparent financial solutions.
According to GFG, this Series A round marks the next step in its growth as total revenues increased by over 40 per cent from 2019 to 2020.
Over the year, it has witnessed key milestone developments such as strong consumer adoption of its new services. AutoInvest, its first retail wealth management product, nearly doubled in monthly users in December last year.
Its insurance distribution which launched in April 2020 also saw exceptional growth, quadrupling its monthly active users to over 4.5 million in three months and distributing over 70 million insurance policies to date.
However, GFG’s increased war chest comes at a time when the finance landscape in SEA gets increasingly competitive.
Not only is it up against rival Gojek and its GoPay platform in multiple markets, it also has to contend with e-commerce and gaming giant Sea, which is pushing aggressively into financial services in the region.
Serving The Underbanked Segment In SEA
Adding to this momentum, the Monetary Authority of Singapore granted the Grab-Singtel consortium a full digital bank license to serve underbanked segments.
GFG, which is not yet profitable, said this latest investment taps into the vast financial services market opportunity in SEA, which is expected to have a full revenue potential of US$60 billion by 2025.
Hanwha Asset Management’s participation as a lead investor, the continued conviction from early Grab investors GGV Capital and K3 Ventures, as well as the funds by renowned fintech VCs Flourish Ventures (affiliated with eBay founder Pierre Omidyar) and Arbor Ventures, are key indicators of investor confidence in GFG’s track record of delivering hyperlocal innovations at scale.
“We are at an inflection point in Southeast Asia, as the pandemic has accelerated the need for digital financial services that help us grow and protect our incomes,” said Reuben Lai, Senior Managing Director of Grab Financial Group.
“We are delighted to draw upon the expertise of top investors who know financial services and fintech well, so that we can continue to build and open up access to affordable and transparent financial services for millions of underserved people and small businesses, and make inroads into financial inclusion in the region.”
In a region where over 70 per cent of the adult population is still underbanked, and millions of SMEs still need crucial funding, GFG aims to help bridge these unmet needs and close the financial inclusion gap.
With the COVID-19 pandemic bringing even more people and businesses online, GFG is well-positioned to further support millions of Southeast Asians with its suite of digital financial services.
Featured Image Credit: Reuters
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