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According to Carmen Yuen, partner at Vertex Ventures, Grab will not become the only player in Vietnam’s booming market for ride-hailing services, even after it merged with Uber, its major competitor in Southeast Asia.
The investor told VIR that a newcomer will soon break into the scene and challenge Grab’s dominant position in the region, including Vietnam.
“I am sure some wealthy investors will back another company and compete with Grab,” said Yuen during the Invest ASEAN 2018 conference held by Maybank Kim Eng in Singapore this week.
Vertex Ventures was the only investor in Grab, formerly GrabTaxi, during a Series A fund-raising round in 2014.
|The merger between Grab and Uber has sparked fears over a potential monopoly and rate hikes|
The investor pointed out a similar case in China: Uber’s operations in the country were acquired by major rival Didi Chuxing in 2016 as part of a massive $35-billion deal.
The merger has sparked concerns over the latter acquiring a monopoly over the domestic ride-hailing market. However, in early 2018, the leading consumer buying retail website Meituan has announced its venture into this market, facing off with Didi Chuxing.
According to Carmen Yuen, it is natural for newcomers to want a share in such a fast-growing market like Southeast Asia, especially Vietnam. Just recently, Indonesia’s tech giant Go-jek has announced its expansion into the Philippines and Vietnam, five years after it came to dominate the Indonesian market in a wide range of services, from ride-hailing to delivery and laundry bookings.
The battle between Grab and Go-jek will be an interesting one, as both startups are flush with capital from eager investors in the region. Grab recently partnered with Hyundai Motor after raising $2 billion from Didi Chuxing and SoftBank last year, while Go-jek collected $1.2 billion last month from a dozen investors, including Google and BlackRock.
This week, Grab announced its merger with Uber’s ride-hailing and food delivery business in Southeast Asia. In return, Uber will own a 27.5 per cent stake in Grab and its CEO will become a member of Grab’s board. The merger is still subject to regulations, and Singapore’s competition watchdog said that it will keep an eye on Grab.
The merger, which has been talked about for months, sparked fears of monopoly and fare hikes in Southeast Asia. Uber’s employees, including drivers, are concerned that they may lose their jobs following the acquisition.
In interviews and news releases following the merger, Grab said that it will ensure that rates remain affordable and arrange new positions for Uber's staff members.
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