A logo of Toyota Motor Corp is seen at the company's showroom in Tokyo, Japan June 14, 2016.
The investment comes as carmakers continue to pour money into ride-hailing services around the world, to help facilitate market share expansion by selling cars to ride-hailing firms or cooperate on connected vehicle solutions as the future of mobility appears to shift away from private auto ownership. In 2016, General Motors invested US$500 million in Lyft, and Volkswagen also poured US$300 million into Israeli taxi app Gett in the same year.
Grab called it the largest-ever investment globally by an automotive manufacturer in the ride-hailing sector.
The $1 billion investment is part of a broader fundraising round by Grab, which said it will use the money to further expand its food delivery service and mobile payment platform across the region.
"We will work with partners like Toyota to continue to transform transportation in Southeast Asia", Grab said in an email. The carmaker first invested an undisclosed amount in Grab in August past year, after it invested in US-based Uber in 2016 in a partnership for a financing programme that allowed Uber drivers to lease vehicles from Toyota and drive for Uber to cover the payments.
A Toyota executive will be appointed to Grab's board and another Toyota representative is being tapped to be an executive officer at Grab, the company said. In addition, collaborations in driving-data-based automotive insurance, financial services for Grab drivers and maintenance services are also contemplated under the new partnership. "We want to be the one-stop mobility platform for users".
"Together with Grab, we will develop services that are more attractive, safe and secure for our customers in Southeast Asia", he said. The Malaysian-born but now Singapore-based company has its namesake app in over 100 million mobile devices, giving passengers access to over 6.6 million drivers and agents.
Toyota Motor Corp has agreed to invest USD1 billion in Southeast Asian ride-hailing firm Grab as a lead investor in the company's ongoing financing round.
Grab, which is headquartered in Singapore, is a leading player in the ride-share industry in Asia, and earlier this year agreed to acquire United States giant Uber's regional operations.
Other Grab investors include Japan's Honda Motor Co Ltd, South Korea's Hyundai Motor Co and Chinese ride-hailing firm Didi Chuxing.
Grab's main rival is now Indonesia's Go-Jek which last month said it would invest $500 million to begin expanding overseas.