Grab to acquire Indonesian O2O platform Kudo
By Masyitha Baziad April 4, 2017
- Expands Grab’s payments ecosystem to support growth in online consumer spending
- Marks first investment of the US$700 million ‘Grab 4 Indonesia’ 2020 master plan
GRAB, a ride-hailing and mobile payments platform in Southeast Asia, on April 3 announced that it has entered into an agreement to acquire Kudo, an O2O (online to offline) ecommerce platform in Indonesia.
Upon closing, the Kudo team and platform will be integrated with Grab’s proprietary mobile payments platform, GrabPay.
Kudo’s O2O platform enables Indonesia’s unbanked consumers to shop online by connecting them with online merchants and service providers via Kudo’s network of more than 400,000 authorised agents in 500 towns and cities across Indonesia.
GrabPay’s reach across Indonesia’s major cities will complement Kudo’s presence across smaller cities and rural areas.
Grab plans to support and accelerate the expansion of Kudo’s agent network while also leveraging on Kudo’s reach to bring more riders, drivers and GrabPay users onto the Grab platform.
Additionally, Grab and Kudo also plan to explore opportunities to grow Kudo’s financial services offering, including insurance and consumer loans.
“Kudo is revolutionising how consumers in Indonesia pay for goods and services, and we are very pleased to welcome them to the Grab family,” says Grab president Ming Maa.
“Combining Kudo’s innovative O2O ecommerce solution and extensive agent network with GrabPay and Grab’s massive and active customer base will advance our mission of providing millions of people across Indonesia with increased access to convenient cashless payments and new income opportunities, while also unlocking compelling new ways to boost online spending.
“Kudo’s integration represents an important first step in our ‘Grab 4 Indonesia’ plan to provide all Indonesians an opportunity to move into the digital economy.”
“Grab shares our vision of creating payments solutions that empower the unbanked to benefit from the rapid growth of ecommerce, and we look forward to embarking on the next stage of our growth as part of the Grab team,” says Kudo CEO Albert Lucius.
“Given that GrabPay is already one of the most widely-used payments platforms in Indonesia, this acquisition creates immediate synergies with our existing business. We are excited to work together to bring the ease and convenience of cashless payments to more Indonesians than ever before.”
This acquisition marks the first investment of Grab’s recently announced ‘Grab 4 Indonesia’ 2020 master plan, a commitment to invest US$700 million in Indonesia over the next four years to further develop its digital economy through the promotion of technology innovation, driving technopreneurship’ in mobile technologies and financial services, and improving access to mobile payments and financing opportunities.
Business as usual… but stronger
Lucius tells Digital News Asia (DNA) that even though all Kudo’s employees are now integrated into Grab, there will be no change in Kudo’s leadership.
“Kudo’s team will work with Grab’s business development teams to identify opportunities to expand both Grab’s car-hailing and GrabPay businesses in the Indonesian market, leveraging on Kudo’s agent network, leading O2O e-commerce platform, and partnerships with leading local and national retailers,” says Lucius via email.
He adds that the acquisition will not affect Kudo’s agent network in the field, and it will be business as usual for them.
“With the acquisition, we are confident that we will be able to create even more exciting new offerings and opportunities for our agents,” he adds.
According to Lucius, the acquisition also reflects a huge market opportunity in Southeast Asia where credit card penetration is less than 10% outside Singapore, although the focus for now will be Indonesia.
“Our near-term focus will be on maximising the opportunity in Indonesia, but over time we are excited to explore opportunities in other markets,” he explains.
According to Lucius, Grab and Kudo make a good pair, sharing the same vision of creating payments solutions than empower the unbanked and enable them to benefit from the rapid growth of e-commerce.
“With Grab’s plans to accelerate the expansion of Kudo’s agent network, Kudo’s reach can bring more riders and drivers to the Grab platform, and we intend to work with Grab to rapidly scale up the number of Kudo active agents around the country,” he concludes.
In November 2016, Grab announced the launch of GrabPay Credits in select markets across Southeast Asia to encourage a move towards a cashless society and improve safety by reducing dependence on physical cash.
By partnering with banks across the region, GrabPay Credits enables consumers to book Grab rides through cashless transactions, even without a credit card, and use promo code discounts exclusive to GrabPay.
Kudo was established in July 2014 by Lucius, a former analyst at Goldman Sachs and product engineer at Apple, and Agung Nugroho, a former consultant at Boston Consulting Group.