If you’ve traveled in Southeast Asia, you’ve probably come across Grab. I’ve been on a few harrowing and exhilarating rides through Ho Chi Minh City on the back of Grab motorbikes. And I’ve yet to see the face of a single helmeted, tinted-windshielded driver. They just speed and weave you to where you need to go. And then they disappear.
So Singapore-based Grab is a ubiquitous ride-hailing presence in the region. But it’s way more than that. Grab is one of several apps emerging from ride-hailing and also messaging, payments, and other sticky applications, that have ambitions to become regional or perhaps global “super apps.” And fintech is the key to evolving from whatever you started as into the one app everyone needs.
To that end, Grab’s ride-hailing business has long since branched out into grocery, essentials, and meal delivery. And of course, payments sit at the heart of all of it. Last summer, during the heart of the pandemic, it launched a suite of tools for small merchants to keep pace with the accelerating shift to doing business online.
A Race to Fintech Dominance
Now, Grab Financial Group, the company’s fintech subsidiary, announced an eye-opening $300 million to grow the fintech operation. The investors are led by South Korean asset management company Hanwha. The amount of the raise is big of course. But in February 2020, Grab raised $856 million to develop its payments business. Grab has raised more than $10 billion since its inception.
Grab has been rolling out a slew of financial products over the past few years, aimed at small businesses and entrepreneurs. And, more recently, it’s been focused on consumers. Some of what Grab offers under the fintech umbrella includes micro-investing, lending, buy now pay later, and more.
So at this point, Grab (currently valued at about $14 billion) is already the regional equivalent of Uber, Instacart, Robinhood, Afterpay, and Paypal, and a few others all rolled into a single platform.
The company operates throughout Southeast Asia. It’s a ubiquitous presence in Vietnam, Thailand, Indonesia, Malaysia, and elsewhere in the region. Its main regional rival is Gojek, which was rumored to be in merger talks with Grab last year. But those talks appeared to fade.
Are Super Apps Just an Emerging Markets Thing?
So why is an app many time zones away from North America so interesting? Some might argue that the ambition to roll everything into one app is an emerging market thing. Perhaps. Asia and Africa are largely mobile-first societies. And prepaid data plans are a dominant feature in many emerging markets. This means many consumers don’t want dozens of apps on their phones eating up precious data. So there is an incentive to combine messaging, ride-hailing, delivery, payments, and more into one app.
The original super app, WeChat, is a dominant presence in China, and many look to it for inspiration. It almost literally does everything. Mark Zuckerberg is one noted WeChat admirer. In fact, last summer Facebook investing in Grab’s rival Gojek, another budding super app. And the focus of that investment was Gojok’s digital payments business and its possible intersection with Facebook’s WhatsApp.
What’s Next for WhatsApp?
Zuckerburg is arguably sitting on the template of a super app in WhatsApp. But our guess is he will be forced to divest that asset in order to get ahead of U.S. regulators who appear eager to break up Facebook.
Earlier this week we wrote about Zoom and how it needed to expand its offering to make itself much less vulnerable to competition from Microsoft, Salesforce, and others. One idea we floated is a combination of Zoom and WhatsApp.
The Zoom-WhatsApp idea is pure speculation at this stage. We imagine WhatsApp will go one in one of a few different possible directions. It could merge with a Zoom to become a dominant communications platform. Or it could roll up Gojek, and maybe Grab, to create a global super app offering consumers and merchants everything from rides on the back of motorbikes to point of sale tech to micro-investing to grocery delivery.
Will this notion ever arrive on U.S. shores? The incentive is there for apps to do more than one thing. And consumers have a limit to the number of apps they will download, let alone use. And there is some movement in the direction. Uber and Uber Eats to cite just one example. However, at this stage, there is no obvious movement to mash all of the high use frequency apps into a single monster app. A collection of sub-super apps is probably a mode likely scenario here.
