Ride-hailing startup Grab will raise $2.5 billion from Didi Chuxing and SoftBank Group, in Southeast Asia's largest-ever single round of financing, the company announced on Monday.

Grab, which operates private car, taxi, carpool, and motorcycle bookings across seven countries in the region, is aiming to challenge its competitor Uber. The deal would value Grab at more than $6 billion and make it the most valuable startup in Southeast Asia, a person familiar with the matter told The Wall Street Journal.

Chinese ride-hailing company Didi Chuxing and Japan's SoftBank group will lead the current round of investment, contributing up to $2 billion, while the remaining $500 million will come from existing and new investors, the company said. The new investors were not disclosed. Grab, which is based in Singapore, is planning to use the funds to strengthen its market share and mobile payment service GrabPay.

Challenging Uber in Southeast Asia could be very lucrative for the company. The regional ride-hailing market could grow to $13.1 billion by 2025, a $10.6 billion increase from 2015, according to a report from Google and Temasek Holdings. Currently, Grab says it provides close to 3 million rides a day and controls 71 percent of the ride-hailing market across Southeast Asia.

Harvard Business School classmates Anthony Tan and Tan Hooi Ling founded the company in 2012. The pair, originally from Malaysia, started the company in the hopes of making taxis safer in the region.

Published on: Jul 24, 2017