Singapore's ride-hailing firm Grab to buy Indonesian online payment startup Kudo

Singapore-based ride-hailing firm Grab, Uber's biggest rival in Southeast Asia, today struck a deal to buy Indonesian online payment startup Kudo.

Grab, Southeast Asia's biggest ride-hailing company, did not disclose financial terms of the deal, but said that the acquisition would come under its recently announced plan to commit $700 million to Indonesia.

''This acquisition marks the first investment of Grab's recently announced 'Grab 4 Indonesia' 2020 master plan, a commitment to invest $700 million in Indonesia over the next four years to further develop its digital economy through the promotion of technology innovation, driving 'technopreneurship' in mobile technologies and financial services, and improving access to mobile payments and financing opportunities,'' Grab said in a statement.

In 2016, Grab announced the launch of GrabPay Credits in select markets across Southeast Asia in order to encourage people to move towards a cashless society and improve safety by reducing dependence on physical cash.

It had partnered with banks across the region for GrabPay Credits, which enables consumers to book Grab rides through cashless transactions, even without a credit card, and use promo code discounts exclusive to GrabPay.

Post closing, Kudo employees and platform will be integrated with Grab's proprietary mobile payments platform, GrabPay.

Kudo was established in 2014 by Albert Lucius, a former analyst at Goldman Sachs and product engineer at Apple, and Agung Nugroho, a former consultant at Boston Consulting Group.

Its O2O platform enables Indonesia's unbanked consumers to shop online by connecting them with online merchants and service providers via its network of more than 400,000 authorized agents in 500 towns and cities across Indonesia.

GrabPay said that its reach across Indonesia's major cities will complement Kudo's strong presence across 500 smaller cities and towns in Indonesia.

Grab plans to support and accelerate the expansion of Kudo's agent network while also leveraging Kudo's reach to bring more riders, drivers and GrabPay users onto the Grab platform.

Additionally, Grab and Kudo will also plan to explore opportunities to expand Kudo's financial services offering, including insurance and consumer loans.

Grab is Southeast Asia's leading ride-hailing platform. Its core product platform includes commuting solutions for drivers and passengers and currently offers its services in Singapore, Indonesia, Philippines, Malaysia, Thailand, Vietnam, and Myanmar.