Japanese auto giant Toyota is investing $1 billion in the Singapore-based ride-hailing firm Grab, the companies said. The deal values Grab at just over $10 billion, according to a report from CNN, which cited a person familiar with the company.
Under the terms of the deal, a Toyota executive will join Grab’s board of directors and a Toyota employee will join Grab as an executive officer.
“I am delighted that we are strengthening our collaboration, which utilizes Toyota’s connected technologies,” Toyota Executive Vice President Shigeki Tomoyama said in a statement.
Grab has said it will use the money to expand its food delivery service and mobile payment platform across Asia.
The deal comes as automakers are investing in ride-hailing companies in response to challenges posed by self-driving technology. General Motors and Volkswagen have invested in ride-hailing companies in the last few years, and Honda and Hyundai have already invested in Grab.
Toyota also invested an undisclosed sum in Uber in 2016.
Grab operates in eight countries across Southeast Asia, including Malaysia, Singapore, Thailand, and Indonesia.
In March, Grab bought Uber’s Southeast Asia business for a 27.5% stake in the merged business. The price tag of that deal was not disclosed.
“This strong partnership [with Toyota] will enable us to become the one-stop mobility platform in Southeast Asia,” Grab Chief Executive Anthony Tan said in a press release. “We will continue to work with global leaders like Toyota in bringing this vision to pass.”
The companies also said they will collaborate on financing programs, insurance, maintenance, and internet-connected cars.
Grab said its app has more than 100 million downloads. It said it would work with Toyota “to create a more efficient transport network that will ease traffic congestion in Southeast Asia’s megacities” and help its drivers increase their income.
Last year, Japan’s Softbank and China’s Didi Chuxing invested $2 billion as part of a financing round that closed in early 2018.