Grab, the Southeast Asian ride-hailing and food delivery giant, has announced that it will discontinue its retail investment products and services in Singapore, citing a lack of commercial viability. The move comes as a surprise, as Grab had previously touted its ambition to become a “super app” that offers a range of financial services to its users.
GrabInvest to wind down by October 13
Grab’s retail wealth management arm, GrabInvest, was launched in 2020 after the acquisition of Bento Invest, a Singapore-based robo-advisory start-up. GrabInvest offered two investment products to its users: AutoInvest and Earn+.
AutoInvest allowed users to invest sums as low as S$1 (US$0.70) with each eligible transaction, such as paying for a ride or ordering food. The investments went into money market and short-term fixed income mutual funds, offering returns of up to 1.18 per cent per annum.
Earn+ was introduced in May this year, as a “low-risk” way for users to invest into institutional funds and earn higher returns of 2 to 2.5 per cent per annum on their idle cash.
Both products were only available in Singapore, as Grab did not roll out either investment product to other markets in the region.
In an email to customers on Monday (Sep 25), Grab said that it was discontinuing AutoInvest and Earn+ and would not be accepting new deposits. Customers have until Oct 13 to withdraw their money from these products. After which, accounts will be closed, and no further transactions will be permitted.
“As we will no longer be investing to scale GrabInvest, we have concluded that the business will not be commercially viable in the long run,” a Grab spokesperson told CNA.
Grab to focus on other financial offerings
The spokesperson added that the decision to wind down GrabInvest was part of the firm’s ongoing efforts to streamline its financial services business “to focus on products with strong ecosystem synergies” such as GrabPay, insurance and lending.
“We remain committed to serving consumers and our partners through these financial offerings,” the spokesperson said.
Grab’s exit from the retail wealth management space due to profitability concerns echoes that of Moneyowl, which announced in August that it would be shutting down by the end of this year.
MoneyOwl, a financial adviser set up by NTUC Enterprise Co-operative in 2018, said it decided to close shop after a review found that the business would not be commercially viable.
Grab’s second-quarter results show narrowing losses
The move also comes after Grab’s recent second-quarter results showed narrowing losses and potentially earlier adjusted earnings before interest, depreciation and amortisation break even.
Grab reported an adjusted net loss of US$111 million for the second quarter of 2023, compared with US$344 million for the same period last year. Its adjusted revenue rose 132 per cent year-on-year to US$550 million.
Grab also said it expects its merger with Altimeter Growth Corp, a special purpose acquisition company (SPAC), to close in the fourth quarter of this year. The deal, announced in April, values Grab at about US$40 billion and is set to be the largest SPAC merger ever.
