Masa and His Bankers Grab a Shared Ride

Nisha Gopalan and Andy Mukherjee

(Bloomberg Opinion) -- Mitsubishi UFJ Financial Group Inc. is investing more than $700 million in Southeast Asian ride-hailing giant Grab. It’s a three-way deal in which everyone gets what they currently lack.

The Japanese megabank and the Singapore-headquartered “superapp,” a one-stop online shop spanning food to finance, get to plug gaps in their businesses. They also keep one of Grab’s existing backers sweet: Softbank Group Corp.’s founder Masayoshi Son will avoid the possibility of an inconvenient cash call from one of his most promising unicorns.

It's no secret that Japanese banks are under pressure to expand overseas as negative interest rates bite at home. Fast-growing Southeast Asia offers an alternative. But there's a catch. Consumer spending in countries like Indonesia, where MUFG owns PT Bank Danamon, is going digital very rapidly — the region’s internet economy is expected to triple to $300 billion by 2025. That’s a lucrative pie for all banks and fintech firms. However, Japan’s banks aren’t exactly known for their digital spurs. 

Backing Grab gives the biggest Japanese lender a chance to earn them. MUFG intends to market a range of financial services from insurance to loans to Grab’s users, Taiga Uranaka of Bloomberg News reported Wednesday. 

What’s in it for Grab? After acquiring  Uber Technologies Inc.’s Southeast Asian operations two years ago, Grab is transforming itself from a ride-hailing service into an umbrella app with finance at its core. It hopes to pick up an online-only banking license in Singapore this summer. That alone will require Grab and its partner Singapore Telecommunications Ltd. to bring S$1.5 billion ($1.1 billion) in capital. Expanding the model elsewhere will be tricky if the unicorn relies too much on SoftBank and its Vision Fund, which it tapped for $1.5 billion last year.

Enter MUFG, which has plenty of capital to underwrite credit risk in Indonesia, Thailand and the Philippines — countries where it already controls local retail banks. Those units can score borrowers looking for loans on the Grab app, as well as put up the actual funding. Having the regional network of a deep-pocketed Japanese institution in its corner should help Grab compete better against rival superapp Gojek, which has allied itself with Singapore's largest lender, DBS Group Holdings Ltd.(1)

As for SoftBank, there must be huge sighs of relief all around. A core startup in its $100 billion Vision Fund’s portfolio won’t be relying on it for more cash. That’s one less mouth to feed in the wake of disastrous bets like office-sharing group WeWork — on which SoftBank took a $4.6 billion writedown — and dog-walking app Wag. SoftBank last week reported a 99% slump in operating profit for the quarter ended Dec. 31, and unveiled plans Thursday to borrow as much as 500 billion yen ($4.5 billion) by putting up shares of its Japanese telecom unit as collateral. Amid widening losses and mass layoffs at Oyo Hotels and Homes, a big SoftBank bet in India, funding Grab’s ambitious expansion is probably beyond Son’s present reach. And Grab must know that constraint.

Yet, as Morningstar Inc. analyst Michael Makdad puts it, SoftBank is one of the biggest corporate borrowers for Japanese banks, one no large lender can afford to ignore or annoy. Writing a check for Grab gives MUFG a welcome chance to iron out any wrinkles from last year when it reportedly balked at contributing to a rescue package for WeWork. Learning new digital banking skills it can bring to its home market will be a bonus. Grab has plenty of room for Masa and his bankers to share the ride.


(1) Interestingly, MUFG's leasing affiliate invested an undisclosed sum in Gojek last year.

To contact the authors of this story: Nisha Gopalan at ngopalan3@bloomberg.netAndy Mukherjee at

To contact the editor responsible for this story: Matthew Brooker at

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.

Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.

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