Toyota’s $1B Investment in Grab to Boost Financial Services in Asia | Auto Finance News

Toyota Motor Corp. late Tuesday announced a $1 billion investment in Grab Holdings Inc. — the largest investment ever from an OEM into a ride-hailing startup — in part to collaborate on driving-data-based automotive insurance and financial services, according to a press release.

Grab operates transportation platforms, food and package delivery, and financial services in 217 cities in eight Southeast Asian countries. Toyota has previously backed Grab with undisclosed sums and has also financially supported competitor Uber Technologies. However, in March, Grab acquired Uber’s Southeast Asian assets, making it “the partner of choice for ride-hailing in the region,” according to the release.

The partnership between Toyota and Grab is technology based but inseparably linked to the ride-hailing service’s financial services ambitions.

In November 2017, Grab launched a mobile payments service and followed that up in March with the ability to provide microloans to drivers. Currently, Credit Saison, Japan’s largest lender, is in a joint venture called Grab Financial Services Asia to provide the loans, according to TechCrunch.

However, it’s hard to reliably make those loans given the short or non-existent credit history of many borrowers in the region. In Southeast Asia, KPMG estimates 27% of the region’s 600 million population have a bank account.

That’s where Toyota steps in. Since August 2017, Toyota and Grab has been developing connected services for Grab “utilizing driving data collected by Toyota’s TransLog data-transmission driving recorder,” according to a Toyota press release. The device is currently in 100 rental cars and is collecting data stored on Toyota’s proprietary mobility services platform (MSPF). This technology allows both companies to better provide driving-data-based automotive insurance for Grab’s rental fleet in Singapore through local insurance companies.  

So far this tech has only been used to provide performance-based insurance but down the line could be used as a point to determine a consumer’s ability to borrow, according to TechCrunch. Grab has a loan book in excess of $700 million through car financing, insurance, and more.

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