Grab’s senior MD on scaling a tech company from Singapore

July 23, 2021

Reuben Lai, Senior Managing Director, Grab Financial Group

Singapore is fast becoming a global hotbed of tech innovation. It's easy to see why. Nearly 80 of the world's top 100 tech firms have set up outposts there, including Google, Facebook, Stripe, Salesforce and homegrown unicorns like the super-app Grab. Business leaders say they choose Singapore for its modern tech infrastructure, strong government support, robust pipeline of talent and pro-business regulations (the World Bank ranks it No. 2 in the world for ease of doing business). Plus, its location in the heart of Southeast Asia serves as a launchpad into the bustling Asian-Pacific market.

Reuben Lai, the senior managing director of Grab Financial Group, said the city-state is an ideal location for operating the business. "We have benefitted from the vibrant Singapore tech ecosystem, which is well-supported by the government and its agencies. We have been able to plug ourselves into the global flow of ideas, talent, innovation and tech that is flowing through Singapore as a tech hub," said Lai. "Today, Singapore is our largest R&D center where we innovate and build products that positively impact millions across Southeast Asia."

Grab Financial Group is the fintech arm of Grab, which started as a ride-hailing app. As the app grew, its founders uncovered other business opportunities. "Grab was founded to solve a transport safety problem, and one solution led to many," said Lai. Namely, it became clear that millions of Southeast Asians either did not have access, or the right level of access, to banking and financial services. Grab Financial Group was established in 2018, and works to drive financial inclusion in Southeast Asia by offering simple, transparent and flexible financial products.

We sat down with Lai to talk about Grab and Grab Financial Group, and learn about the appeal of setting up a tech business in Singapore, which he calls "one of the most exciting and fastest-growing economies in the world." Here's what he had to say.

Grab first started as a ride-hailing app and transitioned to financial services. What is your strategy?

Our Grab Financial Group strategy is quite simple: to evolve our products and services to best meet our users' needs and to improve their quality of life. From launching with GrabPay in 2018 to provide a convenient way for commuters to pay and a safe way for our drivers to receive their earnings, Grab Financial Group has grown to be a fintech platform offering a wide range of financial services. In addition to payments, we offer investing, lending and insurance products. We were also selected by the Monetary Authority of Singapore to set up a Singapore digital bank, which will launch in early 2022.

What are the fintech opportunities you see in Singapore and the Southeast Asia region?

The opportunity is significant. Six in 10 people in Southeast Asia are unbanked or underbanked. 17% of total transactions in Southeast Asia are cashless today, compared to 43% in China. The Southeast Asia market for digital payment wallets is also expected to grow to over $100 billion in transaction value by 2025. There is a market need for more accessible financial products, and we are seeing this in the growth of our businesses. In the first quarter of this year, Grab Financial Group achieved our highest quarterly total portfolio value so far. We are just getting started, and excited about the opportunity to drive greater economic empowerment and financial inclusion in Southeast Asia.

You mentioned you recently received approval to build one of Singapore's first-ever digital banks. What does this mean for you, and what's next in this journey?

We are grateful that the Monetary Authority of Singapore selected us to build a digital bank, or digibank, and believe that it affirms our potential to offer a suite of diversified digital financial services across Southeast Asia to the underserved. Grab Financial Group exists to make financial products more accessible, transparent and convenient for our merchants, users and drivers. The digibank enables us to provide them with a means to upgrade to the full banking experience across the user life cycle. Moving forward, we see an opportunity to drive inclusive prosperity by enabling more people to access the formal banking system, and we will continue partnering with banks toward this end. We have been partnering with over 60 financial institutions and banks across Southeast Asia, and value our many existing relationships, which we will continue to build on.

Can you share more on why Grab is focused on Southeast Asia?

We are focused on Southeast Asia because there is so much more we can and want to do for the region; we have only just scratched the surface. Southeast Asia is one of the most exciting and fastest-growing economies in the world, with 7% GDP growth and twice the population of the United States. Yet, the region is still very much in the early innings of digital transformation. In terms of online penetration, it is 50% of China for food delivery (Southeast Asia is 11% versus China's 21%), 20% of China for on-demand mobility (Southeast Asia is 3% versus China's 15%), and less than 40% of China for electronic transactions (Southeast Asia is 17% versus China's 43%). Additionally, a 2021 report by Boku and Juniper Research found that Southeast Asia is the world's fastest-growing region for mobile wallets.

Southeast Asia has a very large base of middle-income and emerging young consumers. While smartphone penetration is high, there is a deep lack of fundamental infrastructure to support consumer needs in some countries. This creates opportunities for players like Grab to fill gaps and solve problems. As Southeast Asians increasingly seek everyday services online, we believe Grab is well-positioned to capture a total available market that is expected to cross $180 billion by 2025, across mobility, deliveries and financial services. We will continue to expand our existing verticals to capture the overall market.

How do you operate and grow in Southeast Asia from your Singapore headquarters?

Focusing on Southeast Asia has given us a strong home-ground advantage. We have built on this edge by growing "boots on the ground" teams, both operationally and from a tech and product perspective. We establish our leadership teams in each market with locals, who are more in tune with niche problems and create valuable tech solutions for Grab. We have set up R&D centers in places like Ho Chi Minh City, Jakarta, Kuala Lumpur and Singapore. We are hyper-local in how we serve our partners and users in each unique country and city because the specific services that drive the super-app flywheel differ by country.

We also work to cultivate deep relationships with local partners and governments, and find opportunities for collaboration, as that is how we can make the biggest difference in the shortest time. Today, we have a significant number of licenses to operate financial services across Southeast Asia. This includes access to payment licenses in six of our markets, insurance licenses in six countries and lending licenses in five countries. And there's the digital bank in Singapore that I mentioned.

Grab is in eight countries, with its headquarters in Singapore. Why did the team choose Singapore?

Grab's mission and true-north has always been to drive Southeast Asia forward. With Singapore as our headquarters and launchpad to Southeast Asian markets, we have expanded operations to 428 cities in eight countries, with over 9 million drivers, merchants and agents across our network. The opening of Grab's new Singapore headquarters in late 2021 will enable us to continue expanding our team and house up to 3,000 employees and our largest R&D center under one roof. It represents our long-term commitment to Singapore and the Southeast Asian region, and will enable us to groom more tech talents and nurture more Southeast Asia tech startups.

How have government organizations such as the Singapore Economic Development Board been supportive of Grab?

We believe a vibrant tech ecosystem will enable Southeast Asia's long-term economic success, and have partnered with regional governments and their respective agencies to nurture this. In Singapore, government agencies such as the Economic Development Board and the Infocomm Media Development Authority have been valued and supportive partners. EDB was an early partner in "Velocity," the accelerator program of Grab Ventures, which is our innovation arm aimed at discovering and growing Southeast Asia's next generation of tech leaders to drive innovation and digitization in the region. In March 2020, we announced a partnership with IMDA to pilot Grab Ventures Ignite, a 14-week accelerator program for Singapore-based startups with the interest to venture overseas. In February 2021, we announced a Memorandum of Intent with IMDA and Digital Industry Singapore, the joint office of EDB, Enterprise Singapore and IMDA, to support the development of Singapore's tech ecosystem through the local development of our tech talent and R&D capabilities. Through these collaborations, we hope to add depth and vibrancy to Singapore's technology ecosystem, and do good work together that can drive Singapore and Southeast Asia forward.

Any parting words of advice for startup entrepreneurs seeking to successfully grow their businesses in a post-pandemic world?

Starting and scaling one's business is never a picture-perfect journey, and there will be challenges aplenty. A purpose-driven mission will give you the compass and clarity to overcome the many challenges that will come your way. Always be aware of opportunities to add value, in good and bad times, and act on them quickly. Despite COVID-19, Grab came out of 2020 stronger than ever, with our gross merchandise value of $12.5 billion surpassing pre-pandemic levels. This showed the resilience of our business. Have a startup mindset, but keep your eye on the long game, and invest to strengthen your competitive edge. Having a codified DNA also strengthens teams by equipping them with a common understanding and vocabulary. At Grab, we have The Grab Way, also known as the 4Hs (Heart, Hunger, Honour, Humility), which helps to keep us on mission and enables us to support one another as we strive to drive Southeast Asia forward together.

Considering expanding your business to Asia? Download the Singapore Economic Development Board's one-stop guide to Singapore's technology ecosystem to get started.