Singapore’s on-demand taxi service and Uber’s biggest rival in South East Asia, Grab, has started laying roots in India. It will start with a research and development (R&D) facility in Bengaluru. The company has already hired two employees in India over the last month. Another 198 could be employed within the next year, according to one person closely associated with the company. An official announcement is imminent.
Grab’s India operations may be headed by Arul Kumaravel, vice president of engineering. He, however, will not be relocating to India just yet. Kumaravel joined in 2015 when the previous Chief Technology Officer (CTO) Wei Zhu quit. He is the de facto CTO at Grab, which he joined after leaving Amazon.
According to sources, almost 90% of the employees hired in India will be working on Grab’s payments platform. The other 10% will be working on the company’s core strength: cab hailing. Last month, it was announced that Grab was set to acquire an Indonesian payment firm—Kudo—for a reported $100 million to strengthen its closed loop wallet: GrabPay. The wallet, however, according to insiders, “isn’t in the best shape”. And the majority of the hires in Bengaluru will work on improving the user interface and functionality of the payment instrument.
It helps that this is a good time for Grab to be hiring. Several Indian startups have faced massive churn and retrenchment.
India’s cab-hailing market was valued at $1.7 billion in 2016, according to RedSeer Management Consulting, a research and advisory firm. Uber and Ola, according to the advisory firm in a separate research report, provided a combined 500 million rides in 2016. While Grab is not launching its cab business in India just yet, its presence could hint at a possible entry eventually. It might be good news for customers as another price war may be around the corner. It also means that Ola and Uber will have to be alert for another well-funded company entering the market.
Reducing employee costs is one of the primary considerations for a move to India. Bengaluru gives it access to talent. Cheaper talent. Grab, currently, operates in 39 cities—across Singapore, Indonesia, Philippines, Vietnam, Malaysia and Thailand. And the engineering potential in those geographies is far inferior to what India offers. This facility will give Grab the opportunity to expand to new cities and countries without spending too much on recruitment. While recruitment is its first reason for the India adventure, keeping an eye on Uber is another reason.
Its biggest rival, Uber, has been ramping up its Hyderabad R&D facility; it planned to increase the headcount to 500 by the end of 2016. The research at this facility is translated to markets across the world.