Yet another major financing of a car-booking service in Southeast Asia promises to lead to a battle over market share even in this still fast-developing region and a possible fall-out.
Softbank has just led a $250 million investment in GrabTaxi, which operates in six Southeast Asian nations, along with Temasek and GGV Capital. The deal comes only one month after Softbank led a $210 million investment in OlaCabs in India. See prior post on OlaCabs.
Now on top of that comes news that Uber too has raised capital -- $1.2 billion! -- to expand into Asia.
There's a big opportunity for car-hailing services in emerging Asian markets, where car ownership is still comparatively small. What's more, standard taxi service in this part of the world could use improvement, giving an entry point for these new car services.
Car-booking service can be a tough business due to challenges in recruiting quality drivers who own their vehicles to be part of the service.
This will be an interesting space to watch, as local services go up against established western brands. It could be that the space will see some services drop out in an overcrowded, over-funded market. Remember what happened to the group-buying phenomenon with too many look-alike services.
The challenge will be to have a differentiated service that stands out from rivals.
