A unit of Singapore state investor Temasek Holdings is putting its substantial clout behind an app that eases the pain of booking taxis in Singapore and Malaysia, aiming to expand the service in other busy Southeast Asian cities.
Vertex Venture Holdings, a $1.2 billion venture capital firm that focuses on emerging companies and funds in Asia and the United States, said on Tuesday it was leading a group of mostly Malaysian investors putting an unspecified "eight-figure sum" into smartphone app company GrabTaxi.
The app, developed by two Harvard Business School graduates, was launched in Malaysia in 2012 as MyTeksi, and then expanded to Singapore a year later. It also operates in Thailand, Vietnam and the Philippines.
"We invest in potential champions which have developed new technology platforms or business models," Vertex Venture Chief Executive Chua Kee Lock told reporters. "We clearly see GrabTaxi as one such champion in the making."
Booking a taxi is often an arduous task in Singapore, a city state with a population of around 5.4 million and just 28,000 cabs. Many people rely on taxis and public transport, as Singapore is one of the most expensive places in the world to own a private car, but finding a cab during peak hours, and the frequent tropical downpours, is often frustrating.
In other Southeast Asian cities like Manila and Kuala Lumpur, heavy traffic makes finding taxis equally difficult.
GrabTaxi competes in the region with an app from Hong-Kong based company Taxi Hero and Rocket Internet's Easy Taxi app.
In Singapore, it is up against market leader Comfortdelgro Corp, which has its own booking app. GrabTaxi, however, offers commuters a choice from all the taxis that are closest to their location, regardless of which company operates them.
GrabTaxi founder and Chief Executive Anthony Tan said the app was the second most popular in Singapore after Comfortdelgro, and that it had been downloaded on to more than one million mobile devices in Southeast Asia.
He said the company was keen to expand outside Malaysia, because that is where he believed the biggest growth was happening.
"These markets have much bigger population sizes. They're chewing up smart phones like no tomorrow," he said. "I think jumping on this type of wave makes all the difference."
The Vertex Venture-led investment will go into product innovation and building larger local teams to develop and market the app, Tan said. The app would rely on built-in traffic algorithms and feedback from users, he added.