The Singapore-based ride-hailing company said in a statement Wednesday the money would also be used to develop fintech, mobility solutions and logistics to spur the country’s digital economy

The investment will be an addition to the $200 million that Grab will have invested in the country by the end of this year, said Jerry Lim, country head of Grab Vietnam.

Russell Cohen, head of regional operations, said: "This investment is a reflection of our redoubled commitment to Vietnam. The country’s rapidly developing economy and young, mobile-first population makes it ripe for the adoption of digital services."

Grab has seen strong development since it entered Vietnam in 2014. Payments through Moca, its e-payment partner, grew by 150 percent between January and June this year, while the number of active monthly mobile users rose by 70 percent. 

GrabFood saw the number of transactions quadruple in the period to an average 300,000 orders a day. Grab said its driver partners in Vietnam have earned a total of almost $1 billion in the last five years.

Grab's decision for additional investment in Vietnam comes as the ride-hailing market in the country becomes more competitive with the participation of Indonesia’s Go-Jek and Vietnam’s Be.

"Competition in ride-hailing will become fiercer," Reuters quoted Ho Chi Minh-based economist Bui Quang Tin as saying. "The size of the investment means Grab will be able offer heavy discounts even if it risks losses in short term," he added.

Vietnam’s ride hailing and food delivery market is forecast to reach $2 billion by 2025, a report released last year by Google and Singapore sovereign fund Temasek said.