Japanese mobile carrier SoftBank has invested US$250 million in GrabTaxi, a taxi-booking app in operation in Southeast Asia, as it believes the service has significant growth potential.
SoftBank becomes the largest investor in the Singapore-based service, which has users in 17 cities in the region.
Also known as MyTeksi, the same GrabTaxi app can be used to hail the nearest cab in Singapore, the Philippines, Thailand, Vietnam, Indonesia and Malaysia. It provides estimated fares, trackable taxi rides and details about drivers such as photos and vehicle registration numbers.
The startup began business two years ago after being runner-up in a 2011 business plan contest organized by Harvard Business School. It has since expanded to become the largest taxi booking app in Southeast Asia, according to SoftBank and GrabTaxi.
The investment also bolsters SoftBank's presence in Asia outside Japan along with its plan to invest $10 billion in India's Internet market.
"GrabTaxi is the largest and most widely used mobile taxi booking app in Southeast Asia and we believe it has great potential for further growth," a SoftBank spokesman in Tokyo said in an email.
"With this investment we'll also be able to further build on our presence of Internet companies in the region, and will aim to leverage synergies."
GrabTaxi has over 60,000 registered taxi drivers, 2.5 million app downloads and 500,000 active users who use the service at least once a month, the spokesman said, adding that SoftBank will work with GrabTaxi to accelerate its growth.
Cheryl Goh, a spokeswoman for GrabTaxi, said the company will use the investment to fund programs to get more drivers to use the service, as well as on marketing campaigns and staffing so that it can compete against global players.
"Our main competitor is in fact street hailing," she wrote in an email. "We are the largest in the region in terms of bookings, taxi driver network, passenger network and usage, and we have a lead because we probably understand the landscape better."
The move comes as car-sharing service Uber, which also operates in Southeast Asia, has been struggling with regional governments. It has faced pressure from Thai authorities for apparently operating illegally in Thailand, according to local news reports.