On December 2nd, Southeast Asia’s largest ride-hailing and delivery company Grab went public on Nasdaq, after signing a USD 40 billion merger agreement with a SPAC (special purpose acquisition company).
This backdoor listing marks a significant achievement for the nine-year-old company which began with providing ride-hailing services through its app and has now expanded its services to payments, food deliveries, and insurance & investment products in 465 cities across eight countries.
Grab was incorporated in 2012, by Anthony Tan, its chief executive officer, and Tan Hooi Ling, who developed the company from an idea for a Harvard Business School competition. Tan Ling expanded the company’s offerings to a wide range of services, after launching an app for hiring taxis in Malaysia. The firm later shifted its headquarters to Singapore.
Notably, the firm's rivals, including Indonesia's GoTo Group, and Singapore’s regional internet firm Sea Ltd. is also growing exponentially as the region's internet economy is estimated to double to USD 360 billion in gross merchandise volume by 2025.
CEO Tan was quoted saying that Grab’s success demonstrates how homegrown tech companies can develop technology that can compete and win even when international players are in town. He further claimed that Grab's listing will also highlight the opportunities available to investors in Southeast Asia, which is a vast regional market of 650 million people.
Speaking of investors, Grab's listing has been an enormous payoff for early backers such as China’s Didi Chuxing, and SoftBank Group Corp. They were later joined by other investors including Toyota Motor Co., Japanese bank MUFG, Microsoft Corp, and Uber. Notably, Grab had acquired Uber’s Southeast Asian line in 2018, after a five-year-long battle.
Analysts report that many players in Southeast Asia's fragmented financial services and food delivery markets have the scope to grow tremendously, but the road to profitability can be long-winded.
Grab, which completed its merger with the SPAC, Altimeter Growth Corp. aims to have a profitable EBITDA by 2023, cited sources with knowledge of the matter.
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