A venture capital firm backed by Taiwan-based motorcycle maker Kymco has invested $30 million in Grab, Southeast Asia’s biggest ride-hailing service, earlier this month. The amount is not a lot compared to the $9.9 billion the company raised in total since its launch in 2012, but it’s the thought that counts—the thought of the future.
Kymco Capital made the investment to make inroads for Kymco itself to supply Grab’s pan-Southeast Asia fleet with electric scooters, which happen to be a fast-growing product line in much of the world.
Grab calls the injection from the Taipei-based VC firm a “partnership” that will let both sides find ways to develop and use electric scooters. The vehicles would probably run on batteries that can get juiced up at Kymco’s Ionex-branded charging platforms in cities where Grab operates; Grab is in 339 cities across eight Asian countries.
The two sides didn’t say how many electric scooters the partnership could cover, but media reports suggest it might eventually fan out to 250 million rental bikes in Southeast Asia, including 110 million in Indonesia. About 80% of the Kymco-backed venture capital will go toward GrabWheels, Grab’s scooter rental service.
“Kymco Capital’s role is an investment team, the middle guy, and we hope to facilitate cooperation,” says Hans Sun, a director at the VC firm.
The ride-hailing service was already “steadily expanding its electric vehicle ecosystem” through ties with government agencies and other private companies, Grab says in a statement. Those tie-ups should eventually make EVs cheaper and more available to Grab drivers, the company added. “By gaining insights on how to better operationalize and expand EV fleets, Grab can codevelop policies with governments with the aim of making EVs more affordable, thus encouraging driver-partners and fleet owners to adopt EVs,” Grab explains.
Grab’s ambitions fit with Kymco’s international expansion. The 56-year-old maker of traditional gasoline-powered motor scooters announced in 2018 that it planned to roll out 500,000 electric scooters over three years. The Ionex battery recharging scheme will be available in 20 countries, Taiwan’s CommonWealth magazine reported in April 2018.
Kymco Capital managing partner Gary Ting called Grab “a platform-firm with excessive potential” during a news conference broadcast earlier this month on YouTube. Ting said the venture capital firm sees 2020 and 2021 as “explosive years” for EVs. Kymco Capital had revealed last year a focus on Southeast Asian startups after a decade of investing in China’s automotive supply chain.
“Big for Kymco, big for Taiwan,” says Jamie Lin, founding partner of Taipei-based angel investment fund AppWorks Ventures, summing up the Kymco Capital offer to Grab. “It’s a significant partnership with a leading Southeast Asian unicorn—decacorn, to be more exact.”