Uber will sell its business in Southeast Asia to a local competitor, Grab, the ride-hailing company announced late Sunday, in a deal that experts say is created to position Uber for an initial public offering next year. In July 2017, Uber also pulled its operations out of Russian Federation by merging with top competitor Yandex.Taxi.
The acquisition sees Grab taking over Uber's operations and assets in Singapore, Malaysia, Indonesia, the Philippines, Thailand, Myanmar, Cambodia and Vietnam.
As per a Reuters report, Uber invested $700 million in its Southeast Asia business, less than the $2 billion it burned through in China before ceding its operations there to Didi. Uber's CEO Dara Khosrowshahi said in November at a conference in NY that the company's Asia operations were not going to be "profitable any time soon".
Singapore-based food delivery and rideshare service Grab has agreed a deal to acquire Uber's South East Asian operations, including the UberEats food delivery service. It was most recently valued at $6 billion, according to CB Insights.
Uber has been struggling to stem increasing losses, which amounted to $4.5 billion past year, as it also tries to tamp-down corporate scandals and an internal shakeup that replaced its CEO, Travis Kalanick.
Uber and Singapore-based Grab, Southeast Asia's biggest ride-hailing firm, declined to comment.
Grab will integrate Uber's ridesharing and food delivery business in the region into Grab's existing multi-modal transportation and fintech platform.
New boss Khosrowshahi has vowed to turn the company around as Uber gears up for a 2019 public share offering.
Grab, which started out as a taxi-hailing app in Kuala Lumpur in 2012, became the region's dominant ride-hailing service in past years with $4 billion raised from investors. Misra made the remarks shortly after becoming an Uber board member as part of the SoftBank investment.
But Khosrowshahi indicated that Uber does not have plans to quit India or other major markets anytime soon.
The deal marks the industry's first big consolidation in Southeast Asia, home to about 640 million people, and puts pressure on Indonesia's Go-Jek, which is backed by Alphabet's Google and China's Tencent.