Grab, Uber’s main rival in Southeast Asia, is continuing to develop its mobile payment strategy after it announced the acquisition of India-based startup iKaaz.
The deal — which is undisclosed — will see iKaaz’s engineering team join the Bangalore-based engineering office which Grab opened last year. The firm declined to say how many new recruits are moving over from iKaaz, but a spokesperson disclosed that Grab currently has 75 engineers in Bangalore with plans to grow the number to 200 before this year.
Grab also has engineering teams in Singapore, Jakarta, Ho Chi Minh City, Beijing and Seattle. The company claims it is Southeast Asia’s top ride-hailing app with more 70 million downloads.
Southeast Asia has a cumulative population of more than 600 million consumers. Ride-hailing in the region is predicted to grow into a $20.1 billion per year industry by 2025 up from $5.1 billion in 2017, according to a report co-authored by Google.
iKaaz was founded in 2012 by former Nokia engineer Soma Sundaram. Its products include a cloud-based platform for online sellers, point of sale hardware for retail merchants and a mobile wallet solution. Following the acquisition, only the consumer-focused mobile wallet product — MOWA — will live on via a Grab-owned unit.
“The existing Mowa wallet that serves the India market will continue as a separate company with its own leadership and staffing. iKaaz’s existing client-facing business will be separated into a separate entity, which will continue to support its merchant and bank contracts in India,” a Grab spokesperson explained.
Grab seems likely to use iKaaz’s product knowledge — particularly its POS and mobile payment experience — to develop its nascent GrabPay service. Grab began working on its payment platform in 2016 and last year it acquired Indonesian startup Kudo for up to $100 million to boost its offline network.
The company has moved beyond merely processing customer rides using credit cards, with GrabPay becoming a mobile payment app that can be used outside of Grab’s transportation services. Support for payment via GrabPay rolled out to Singapore-based merchants in November, initially among street food vendors, and the company is looking to expand that effort across Malaysia, Indonesia and other parts of Southeast Asia this year.
That focus on other services is also shared by Go-Jek, the unicorn startup that is widely believed to be ahead of both Uber and Grab in Indonesia. By focusing on services, like food delivery, and payments, Grab and Go-Jek hope to raise engagement and become a daily go-to app for users. Uber, meanwhile, offers UberEats in some parts of Asia but it has no other non-transportation services.
iKaaz previously raised undisclosed seed investments. Back in 2014, the startup was said to be in talks to raise as much as $10 million but no deal was struck.