Didi, the largest cab service in China, and SoftBank are investing $2 billion in the Southeast Asian ride-hailing startup Grab. Apart from the funds from these two major entities, Grab also plans to raise an additional $500 million from other investors.

Grab Uber Didi
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Didi backs Grab to topple Uber

Didi Chuxing and Japan’s SoftBank group are already investors in Grab, and now, they are simply increasing their investment by a combined $2 billion, according to a statement made on Monday. Chinese giant Didi Chuxing, which acquired Uber’s China operations in August 2016, invested $350 million in Grab in 2015 with an aim to topple Uber. Softbank first led Grab’s $250 million Series D in 2014.

In a statement, Didi’s chief executive Cheng Wei said both companies are looking forward to working together with communities and policymakers across Asia to tap the extraordinary opportunities in the upcoming transportation revolution.

“Starting with transport, Grab is establishing a clear leadership in Southeast Asia’s internet economy based on its market position, superior technology, and truly local insight,” Wei said.

Following the latest investment, the ride-hailing startup will reportedly be valued at more than $6 billion. Regarding how the funds will be used, Grab Chief Executive and Co-founder Anthony Tan stated that the additional funds will be used to maintain the company’s leading position in the region and invest in GrabPay, the company’s mobile payments platform which allows for cash-free payments.

Grab’s new investment comes as more bad news for the U.S. firm, which is struggling with a string of issues such as the intellectual property tussle with Google’s Waymo, issues in the workplace as reported by female employees, use of notorious software to dodge transportation regulators, and finally, the departure of CEO Travis Kalanick. Earlier this month, Uber agreed to sell its business in Russia to local rival Yandex.

Southeast Asia is a big market

Grab provides car, taxi, motorbike and carpooling services in seven countries and 65 cities across Southeast Asia, catering to over 650 million people. Grab, which was founded by Malaysians Anthony Tan and Tan Hoi and headquartered in Singapore, holds a 95% share in third-party ride-hailing and 71% in private-ride hailing.

“With their support Grab will achieve an unassailable market lead in ride-sharing, and build on this to make GrabPay the payment solution of choice for Southeast Asia,” Tan said.

The opportunities in the Southeast Asian market is plenty, and over the years, many start-up technology firms have been competing aggressively to get the largest piece of the growing market. According to a report co-authored by Google last year, Indonesia has the potential to contribute more than half of the revenue of ride-sharing services across the region by 2025, and the overall industry is expected to grow at $13.1 billion, an increase from $2.5 billion in 2025.

In the beginning of 2017, Grab announced a $700 million investment program to strengthen its footing in Indonesia. Out of the $700 million, about $100 million will be used in investments and acquisitions. Thereafter, Grab went on to buy offline payment startup Kudo two months later, according to TechCrunch.