Uber Technologies has just announced the sale of its business in Southeast Asia to rival Grab, marking the second withdrawal in Asia.
`A 27.5% stake in a growing business is valued at 6 billion USD, which is a bargain price for Uber after investing 700 million USD in the Southeast Asian market after 5 years,` Techcrunch commented on
Withdrawing from Southeast Asia is the third time Uber has chosen to sell its business in exchange for shares of its competitors.
For Uber, the deal to exchange for shares of a rival business is not simply a decision to withdraw from a weak market.
Since taking office last year, Khosrowshahi has been urged to restore the company’s image by beautifying financial figures and corporate culture, to prepare for an IPO next year.
Since its founding 9 years ago, Uber has spent $10.7 billion.
Some experts believe that if it continues to focus on a weak market, the amount of money Uber has to spend will increase greatly.
Before this transfer was decided, predictions of a merger in a fiercely competitive market like Asia emerged after SoftBank Group poured billions of dollars into Uber.
Techcrunch estimates that the 27.5% stake that Uber received in Grab is worth about 1.6 billion USD, more than double the amount of money that Uber has poured into the Southeast Asian market after 5 years of operation.
Temasek’s report estimates that Southeast Asia’s ride-sharing market could quadruple in value over the next 7 years, reaching about 20 billion USD by 2025. Grab is the leading name in this region with
`Uber may continue to increase investment and achieve certain successes in Southeast Asia, but accepting this deal could help shift resources to other key markets,` Techcrunch commented.
And Uber also has a lot of work to do to strengthen its business in core markets.
The dispersion of resources makes Uber weaker in markets with big local names.
In Asia, Uber has many other key markets, including Japan and India.
Didi Chuxing – the rival that knocked Uber out of the Chinese market, and has the same shareholder as SoftBank, is clearly showing its globalization ambitions and threatening some of Uber’s key markets.
In India, Uber is in a years-long `war` with Ola, a startup based in Bangalore.