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Grab Financial Group secures more than $300 million in series A funding
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The series A funding round for the Grab Financial Group, led by Hanwha Asset Management, will further spur new digital financial services, currently prepared by team members inside the Grab Tech Center, to boost financial inclusion among Southeast Asia’s unbankable people. (Courtesy of Grab Indonesia)
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rab Financial Group (GFG), a Southeast Asian financial technology platform, part of Singaporean technology company Grab, has secured more than US$300 million in series A funding, led by South Korea’s leading asset management company Hanwha Asset Management, to help bolster financial inclusion in Southeast Asia.
Announced on Jan. 14, other investors that injected capital into GFG in this round were K3 Ventures, GGV Capital, Arbor Ventures and Flourish Ventures.
GFG Senior Managing Director Reuben Lai said investing in fintech companies was essential, considering the potent powers of digital financial services to boost financial inclusion.
“This marks a pivotal point in our business with more consumers adopting digital financial services. We want to secure funds exclusively for the GFG owing to the fact that despite strong business growth, in reality millions of marginalized people and small businesses lack transparent and accessible inclusion to financial services,” Lai said.
“Therefore, we are excited to tap into the expertise of the best investors who understand financial services and the fintech landscape really well so we can continue empowering the future of the financial industry for the sake of the Southeast Asian people and business entities. This way, we can seize the existing momentum to add value, all the while ensuring sustainable business growth,” he continued.
To provide a context, the series A funding round marks yet another milestone in GFG’s growth. Previously, the company achieved more than 40 percent revenue growth from 2019 to 2020. The company attributed the business growth to rapid consumer adoption of its services upon its launch of a new service called AutoInvest, the first retail wealth management product it has ever rolled out, which had doubled its users as of December 2020.
GFG has also recorded rapid growth in its insurance product adoption, with a fourfold increase in monthly active users within just three months of its initial figure of 4.5 million users when the product was released in April 2020. At the same time, GFG has also distributed more than 70 million insurance premiums since its launch.
The latest capital injection has further strengthened GFG’s leadership in the fintech industry, as well as its capacity to continue building a sustainable and diverse business network to seize the widely available financial services market opportunities in Southeast Asia.
To return to the financial inclusion issue, in a region where more than 70 percent of the adult population is still unbankable and millions of micro, small and medium enterprises (MSMEs) – the backbone of the region’s economy – are still in desperate need of capital injection, GFG can help close the gap by offering lending, insurance and retail wealth management services. These services are expected to help more individuals and MSMEs access financial services.
The COVID-19 pandemic, which has accelerated the digital transformation of businesses, has provided an impetus for GFG to leverage its activities in supporting millions of Southeast Asians with its array of digital financial services. With all these forces combined, GFG expects to earn potential revenue of US$60 million in 2025. To achieve that long-term goal, the GFG said it would grow its business to achieve higher margins, invest in human capital in a more sustainable manner and expand its affordable, user-friendly and transparent services in Southeast Asia.
The series A funding is supported by investors that have gained worldwide renown.
With Hanwha Asset Management leading the funding process, it also involves GGV Capital and K3 Ventures, which have continued their support since they became Grab’s initial investors, as well as prominent fintech venture capital company Flourish Ventures (affiliated with eBay founder Pierre Omidyar) and Arbor Ventures.
Their participation indicates these high-profile investors’ trust in GFG’s future as a growing hyperlocal innovator and its capability of boosting financial inclusion in Southeast Asia.
Hanwha Asset Management Chief Executive Officer Kim Yong-hyun said the company was really proud to lead the series A funding for GFG, as part of Hanwha’s expertise and interest in the fintech sector. By leading the funding for GFG, according to Yong-hyun, Hanwha is also continuing its effort to encourage sustainable investment in this sector.
“We are very happy to invest in a company that can carry out social responsibility as an accelerator of financial services for the underbanked and unbanked populations in Southeast Asia,” Yong-hyun said.
“We hope the GFG can sustain its rapid growth, aided by its innovative business model, which supports the lifestyle transformation of consumers at large, while maintaining a synergistic cooperation with Grab, the biggest unicorn in Southeast Asia,” he continued.
The Monetary Authority of Singapore has appointed a Grab and Singtel consortium to set up a digital bank, demonstrating Grab’s capability in serving unbanked people.
