Uber Exits Southeast Asia with Sale to Regional Rival

Uber Technologies Inc. is selling its ride-hailing and food delivery operations in southeast Asia to rival Grab Taxi Holdings Pte Ltd. in exchange for a 27.5% stake in the Singapore-based company.

Analysts note that the divestiture will help shore up Uber’s bottom line ahead of an initial public stock offering that’s expected in 2019. In the past two years Uber also has sold its operations in China and Russia.

The company, which has burned through $10.7 billion since its launch in 2009, is currently valued at just under $50 billion. This compares with a peak of $69 billion in 2016. Uber lost $4.5 billion in 2017.

In a blog post, Uber CEO Dara Khosrowshahi notes that Uber’s past globalization strategy waged “too many battles” on multiple fronts with too many competitors. The company lists Australia, Latin America, New Zealand and the U.S. as its core markets. Uber also has a large presence in India but is battling local rival Ola in that market.

Grab operates in 191 cities—about three times as many as Uber—in the southeast Asia’s eight countries. With less competition, Grab can reduce ride discounts. The company, which was founded in 2012, also aims to launch an autonomous taxi service by 2022.

Japan’s SoftBank is the largest investor in both Uber and Grab—and has a large stake in Ola. Honda and Toyota also have invested in Grab, and Hyundai bought an undisclosed stake in the company earlier this year.