Experian is investing in Singaporean ride-hailing firm Grab

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Grab, the Singaporean ride-hailing firm, has secured an undisclosed investment from the consumer credit reporting firm Experian as part of its ongoing Series H funding round, per a press release.

Grab, which aims to raise $6.5 billion for its Series H round and secured $300 million from asset manager Invesco earlier in June for the round, has been increasingly broadening its financial services push. And the strategic partnership with Experian is aimed at helping the firm double down on its efforts to offer financial services to the region's huge underbanked population.

Here's what it means: Grab's been aggressively pursuing the financial services sector over the last year - an effort the Experian tie-up should help accelerate.

The bigger picture: As they look to remain relevant and get closer to customers who've long been out of reach, incumbent players are increasingly trying to hitch rides with the likes of Grab.

For legacy players, partnerships with platform-based businesses like Grab offer a rare opportunity to tap into these players' huge user bases. In the past, being relevant to, and reaching, consumers meant FIs needed to have a large footprint of physical branches. As more and more consumers turn to digital platforms for their needs, including financial services, these physical presences are no longer necessary.

Instead, by partnering with the likes of Grab, incumbents like Experian and FIs like Citi can tap into these players' ecosystems and reach huge numbers of consumers. Citi's partnership with Grab, as well as Goldman's agreement with Apple to launch cobranded credit cards, is an example of this growing trend. However, as more incumbents look to ink deals with digital players, the competition to sign up the most successful platforms is going to be fierce.

Given this, we anticipate established FIs that fail to adequately transform their businesses for the digital age will struggle to position themselves as preferred partners for the likes of Grab.

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