Grab, Southeast Asia’s biggest ride-hailing and delivery firm, was to make its market debut yesterday, after a record US$40 billion merger with a special purpose acquisition company (SPAC), in a listing that is to set the tone for other regional offerings.
The backdoor NASDAQ listing marks the high point for the nine-year-old Singaporean company that began as a ride-hailing app and now operates across 465 cities in eight countries, offering food deliveries, payments, insurance and investment products.
Grab’s rivals, including regional Internet firm Sea Ltd (冬海) and Indonesia’s GoTo Group, are also bulking up, with the region’s internet economy forecast to double to US$360 billion in gross merchandise volume by 2025.
Photo: Reuters
Grab was founded by chief executive officer Anthony Tan (陳炳耀) and Tan Hooi Ling (陳慧玲), who developed the firm from an idea for a Harvard Business School venture competition in 2011.
CEO Tan, 39, expanded Grab into a regional operation with a range of services, after launching as a taxi app in Malaysia in 2012. It later moved its headquarters to Singapore.
“What we have shown to the world is that homegrown tech companies can develop great technology that can compete globally. Even when international players are in town ... we can compete and win,” Tan said, adding that Grab’s listing would help showcase the opportunity available to investors in Southeast Asia, a region with a population of about 650 million.
Grab’s listing brings a payday bonanza to early backers such as Softbank Group Corp and Chinese ride-hailing giant Didi Chuxing (滴滴出行), which invested as early as 2014.
They were later joined by others, such as Toyota Motor Corp, Microsoft Corp and Japanese bank Mitsubishi UFJ Financial Group Inc. Uber Technologies Inc became a shareholder in the company in 2018 after selling its Southeast Asian business to Grab following a five-year battle.
Analysts see scope for many players in Southeast Asia’s fragmented food delivery and financial services markets, but the road to profitability might be long.
In September, Grab cut its full-year adjusted net sales forecasts, citing renewed uncertainty over COVID-19 pandemic curbs on movement.
Third-quarter revenue fell 9 percent and adjusted loss before interest, taxes, depreciation and amortization (EBITDA) widened 66 percent to US$212 million.
Grab said gross merchandise value jumped 32 percent in the quarter to a record US$4 billion.
It aims to turn profitable on an EBITDA basis in 2023.
Grab said it completed its business combination with the SPAC, Altimeter Growth Corp.
Grab is to begin trading on NASDAQ under the ticker symbol “GRAB.”
Alongside the SPAC transaction, Grab raised US$4.5 billion, including US$750 million from Silicon Valley tech investor Altimeter Capital Management LP in April.
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