Grab expands in online payments business by acquiring Kudo

Grab, the ride sharing startup primarily present in the Southeast Asia, is expected to acquire Indonesia’s online e-commerce payments business startup Kudo aimed at beefing up payment services while expanding its reach across Southeast Asia’s largest country. It is the first deal done by Grab after it pledged to pour $700 million in Indonesia, the startup’s largest market. While Kudo helps consumers without bank accounts to shop online by connecting them with online merchants and other service providers, Grab plans to accelerate the expansion of that network while using Kudo’s reach to bring more riders and drivers onto its own platform.

Grab had also launched Grab-Pay in 2016, a digital wallet business, to compete against Indonesia’s Go-Jek. It is also competing against Uber for dominance in the Southeast Asia’s largest market Indonesia. The startup, valued at more than $3 billion, intends to set aside as much as $100 million to bankroll early-stage domestic start-ups in mobile and financial services. It’s now establishing research centers in Jakarta, Bengaluru and Ho Chi Minh City to complement engineering offices in Singapore, Beijing and Seattle.

Indonesia is Grab’s largest market and witnessed 600% jump in car and motorcycle hailing business in 2016. With the country’s internet penetration on the rise, the ride hailing business is further expected to grow in tandem.