Toyota may be late to the ridehailing game, but the company sure knows how to make up for lost time.
The automaker recently invested $1 billion in Asian ridesharing service Grab, marking the industry’s largest-ever financial commitment by a car manufacturer.
The monetary boost brings the Singapore company’s total valuation up to more than $10 billion. In exchange, Toyota will get a seat on the board at the biggest ridesharing business in Southeast Asia and the chance to name a top executive to the Grab team.
The move coincides with a concerted effort by Toyota to venture more deeply into the world of shared automobiles. The company announced late last year that it would open a spin-off business, Toyota Mobility Service Co., this April.
Representing the merged assets of Toyota’s fleet leasing and rental subsidiaries, the new 1,050-employee business will focus on strengthening Toyota’s leasing partnerships and developing “value-added services” pertaining to shared mobility.
Its investment in Grab could be a prime example, with its seat on the board a useful place to lobby the rideshare company to buy—or rent—cars from Toyota.
Grab has already benefitted from an initial, albeit much smaller, investment from the manufacturer last year. That boost helped the ridehail operation do away with top competitor Uber, which sold its operations, including the food delivery service UberEats, to the Asian giant. (Uber now has a 27.5% stake in the company and also landed a seat on the board at Grab.)
Still, Grab is not the only ridehailing service benefitting from Toyota’s burgeoning purse.
The world’s most valuable carmaker—with a market capitalization of more than $200 billion—has also laid claims in Uber, Chinese ridesharing giant Didi Chuxing, and Japan Taxi, which represents Uber’s biggest competition in the Asian nation.
With so much to spend—and so much at stake—it seems Toyota is following one of the oldest rules of investing: a diversified portfolio is a happy portfolio.