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Asian Uber rival Grab secures investment from Honda

Japanese automaker Honda has invested an undisclosed sum into Southeast Asia ride-hailing service Grab, the start-up said on Monday, as it looks to boost its services amid increased competition from the likes of Uber.

In September, Softbank led a $750 million funding round in Grab, and the company said that the Honda investment formed part of that deal.

Honda is the largest manufacturer of motorcycles in the world and the partnership with Grab will see the two work together on safety initiatives for the ride-hailing firm's drivers.

"Our number one missions is to provide a safe and reliable transportation service, and so the key focus of this will be Honda doing driver safety training at centers and also at their dealers," Ming Maa, president of Grab, told CNBC by phone.

A GrabCar driver displays the support information page on the Grab app on a smartphone in an arranged photograph in Singapore, on Monday, Oct. 31, 2016.
Ore Huiying | Bloomberg | Getty Images
A GrabCar driver displays the support information page on the Grab app on a smartphone in an arranged photograph in Singapore, on Monday, Oct. 31, 2016.

Maa said that the company is still "working on finding out how the partnership will evolve over time." There are technology-focused areas that the two "would love to collaborate on," Maa said without giving specifics, but these conversations are at early stage and "anything is possible."

Honda's strategic investment in Grab marks the latest deal of its kind with carmakers including Volkswagen and General Motors pouring money into ride-hailing services as they bet on shifting models of car ownership.

Grab is focused on the Southeast Asia market and currently is present in six countries and 34 cities in the region. But it is facing increasing competition from the likes of Uber, which is expanding in Southeast Asia, and Go-Jek, a motorbike taxi service. Go-Jek closed a $550 million funding round earlier this year.

Maa explained that Grab could stay ahead of competitors like Uber by "being local."

"Transportation is a very local problem. The transportation issues in Jakarta are very different to New York or San Francisco," Maa told CNBC.

One of the ways Grab looks to do this is by accepting cash payments because many consumers in Southeast Asia don't have bank accounts or cards. Uber, however, has also introduced cash payments in certain cities such as Jakarta, Indonesia.

Maa joined Grab in October from Japan's SoftBank where he was involved in many of the company's investments. Speculation has been rife that the company could go public soon, but Maa said there were no specific plans for an initial public offering (IPO).

"We are laser-focused on keeping our heads down and focused on solving problems for consumers. We are not specifically planning for an IPO, but anything is obviously possible," Maa told CNBC.