Singapore-based ride-hailing service Grab, identified as Uber’s biggest competitors in Southeast Asia has acquired Indian-based startup iKaaz in an effort to develop and enhance its mobile payment strategy. The deal which has remained undisclosed will see the Indian firms engineering team partner with the Bangalore-based engineering office which Grab formally opened in 2017.
Grab declined to clarify how many employees will be making the transition from iKaaz but a spokesman for the ride-hailing colossus confirmed it currently has 75 engineers working out of Bangalore with plans to extend the team to over 200 by the end of 2018.
Grab has enjoyed incredible success since its inception in 2012 and has provided stiff competition for US-based Uber in the Asian shared services market. It’s the region’s top ride-hailing app with more than 70 million downloads. It has engineering teams in Singapore, Jakarta, Ho Chi Minh City, Beijing and Seattle.
Southeast Asia represents a hugely lucrative market for ride-hailing firms with a population of over 600 million consumers. Analysts have predicted that ride-hailing in the APAC region is estimated to grow into a $20.1 billion per-year industry by 2025 which represents a rise of $5.1 billion in 2017. These statistics were based on research from a report compiled by Google.
iKaaz was founded in 2012 by former Nokia engineer Soma Sundaram. Its products include a cloud-based platform for online sellers, point of sale hardware for retail merchants and a mobile wallet solution. “The existing Mowa wallet that serves the Indian market will continue as a separate company with its own leadership and staffing. iKaaz’s existing client-facing business will be separated into a separate entity, which will continue to support its merchant and bank contracts in India,” a Grab spokesperson explained.
Grab seems likely to use iKaaz’s product knowledge — particularly its POS and mobile payment experience — to develop its nascent GrabPay service. Grab commenced work on its payment platform in 2016. In 2017, it acquired Indonesian startup Kudo for up to $100 million to boost its offline network.
The company has moved beyond merely processing customer rides using credit cards, with GrabPay becoming a mobile payment app that can be used outside of Grab’s transportation services. Support for payment via GrabPay rolled out to Singapore-based merchants in November among street food vendors, and the company is looking to expand that effort across Malaysia, Indonesia and other parts of Southeast Asia this year.