Uber Sells Southeast Asia’s Operations To Rival Grab

Grab is South East Asia's most popular ride-sharing firm with millions of users across eight countries. Under the terms of the deal, Uber will take a 27.5% stake in Singapore-based Grab. Uber's chief executive, Dara Khosrowshahi, will also join Grab's board.

The value of the deal has not been made public. Uber, which is preparing for a potential initial public offering in 2019, lost $4.5 billion last year and is facing fierce competition at home and in Asia, as well as a regulatory crackdown in Europe.

It is also recovering from a year of scandals that saw co-founder Travis Kalanick forced out as chief executive in June amid U.S. criminal inquiries and a workplace marred by sexual harassment allegations.

SoftBank gained two seats on Uber’s board of directors through its investment and has said it wants the company to focus on growing in the United States, Europe, Latin America and Australia, but not in Asia, due to the lack of profitability.

Uber’s CEO Dara Khosrowshahi said at a conference in New York in November that the company’s Asia operations were not going to be “profitable any time soon,” particularly because of how heavily Uber was subsidizing rides there.

“The economics of that market are not what we want them to be,” he said at the time. Khosrowshahi, who took over the top job at Uber in August, has been working to clean up the company’s financials ahead taking it public.

Still, during a visit to India in February, he pledged to continue investing aggressively in Southeast Asia.

Grab raised about $2.5 billion last July from Didi, SoftBank and others in a deal valuing the company at around $6 billion. Bloomberg first reported the deal.